Europe Economy

Swiss voters resoundingly reject gold, immigration proposals

Alice Baghdjian
An employee returns a box of one kilogram gold bars to the safe in Budapest, Hungary, on June 17, 2013.
Akos Stiller | Bloomberg | Getty Images

Swiss voters overwhelmingly rejected proposals on Sunday that would have forced the central bank to buy huge amounts of gold and imposed strict curbs on immigration, in what is seen as a result strengthening Swiss ties with the European Union.

The measures proposed on Sunday reflect a growing sense that Switzerland is under siege by foreign workers eroding its Alpine culture and trading partners who have insisted in recent years that the Swiss dismantle their business model based on banking secrecy.

The "Save our Swiss gold" initiative failed to secure a winning vote in a majority of Swiss cantons, the so-called "cantonal majority" required for the initiative to pass, according to data from Swiss broadcaster SRF.

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The proposals, backed by the right-wing Swiss People's Party out of concern the central bank has sold too much of its gold in the past, looked set to be rejected by 78 percent of voters, according to SRF's projections.

The measure would have compelled the Swiss National Bank (SNB) to boost its gold reserves to 20 percent from around 8 percent currently, complicating policy at a time when the central bank is trying to defend a 1.20 euro cap on the Swiss franc imposed at the height of the euro crisis.

The central bank would have had to buy up gold as well as euros when intervening to weaken its currency, potentially casting doubt on the viability of its cap policy.

Uncertainty surrounding the Swiss vote was one of the factors that helped steady the gold market after prices broke through key chart support to reach their lowest in 4-1/2 years earlier this month. was holding just below $1,167 an ounce on Sunday, down 3 percent this year.

"I think (the outcome) is probably largely in the price already - I think we'll see a small correction on Monday post the result," said Ross Norman, chief executive of Sharps Pixley.

A separate initiative that aimed to cut annual immigration by three-quarters from current levels in order to reduce the strain on Switzerland's pristine natural environment also failed to win a cantonal majority, with 74 percent of voters set to reject the proposals, SRF data showed.

Is this Switzerland's gold rush?
Is this Switzerland's gold rush?

The Ecopop referendum, which proposed capping the number of immigrants at just 0.2 percent of the resident population or the equivalent of 16,000 people per year, has been seen as a proxy vote on Switzerland's raft of treaties with the EU, its biggest trading partner.

Had it been accepted, the initiative would have torpedoed the Swiss government's attempts to salvage these treaties, which are conditional on Switzerland's commitment to the free movement of labour, hanging in limbo after the approval of a previous vote to limit immigration in February.

"With this absolutely clear result we can once again look forward and in relation to the bilateral deals find a way forward," said Paul Rechsteiner, president of the Swiss association of trade unions. "This is a very different starting position than what we had after Feb. 9."

A third set of proposals to scrap one of Switzerland's biggest tax perks for expatriates was also defeated.

Switzerland's system of direct democracy gives citizens the right to force popular votes if they can gather enough signatures of support.