Swiss Earmark $6.5 Billion for Jets, Reject Immigration Cap

(Bloomberg) -- Neutral Switzerland voted in favor of buying new fighter jets for as much as 6 billion francs ($6.5 billion) by a razor-thin margin, while citizens rejected a “worse than Brexit” curb on immigration.

Just 50.2% of voters backed the expenditure in a national referendum on Sunday, with less than 10,000 ballots separating the ‘yes’ and ‘no’ camps. A proposal to introduce new limits on immigration from the European Union, however, was defeated by a comfortable margin.

Thanks to voters approving the money for airplanes, “the Swiss army will be able to fulfill its duties in the future,” Defense Minister Viola Amherd said at a press conference in Bern.

Having secured public backing, the government must decide which kind of jets and how many to purchase. Bids from France’s Dassault Aviation SA, Airbus SE, Boeing Co. and Lockheed Martin Corp. have been solicited.

The choice is due to be announced in the middle of next year and the 6 billion francs are a maximum for the expenditure, Amherd stressed.

“If we can buy enough planes that are suitable and cheaper, then will of course look at that too,” he said. “One cannot speak of a blank check.”

Local Support

Whichever company wins the aviation contract will be required to place orders in the country equivalent to 60% of the purchase price of the new planes. The move is designed to help local industry.

The government has been keen to modernize the air force, because its current fleet will need to be retired in 2030. It argues that planes are necessary to keep the country safe, including for when heads of state attend the World Economic Forum in Davos.

Critics, however, argued fighter jets aren’t necessary for a small country in the heart of Europe, and that they won’t do much good in the face of threats like cyber-attacks or natural catastrophes.

The anti-military group GSoA said it would be “highly questionable” for the government to choose a U.S. manufacturer. The group’s secretary, Lewin Lempert, is looking into calling a national referendum once the decision on which brand of aircraft to buy has been announced, broadcaster SRF reported.

Immigration Curbs

By rejecting the limits to immigration from the EU, Switzerland avoided putting itself on a collision course with Brussels and inflicting lasting damage on its economy.

With 61.7% of voters rejecting the measure, the public demonstrated that it wants “solid and sustainable bilateral relations with our most important trading partner,” Justice Minister Karin Keller-Sutter said.

European Commission President Ursula von der Leyen said she considered the outcome “a positive signal” for deepening ties.

The government and business groups had campaigned against the proposed immigration curbs, saying they’d have forced Switzerland to renege on an economically vital agreement with the EU that touches on issues ranging from immigration to transport and public procurement.

Keller-Sutter told newspaper SonntagsZeitung in August that a cancellation would be “worse than Brexit.”

Yet the anti-immigration Swiss People’s Party has for years tried to crack down on the influx of newcomers, saying they depress locals’ wages and cause a housing shortage. Roughly a quarter of Switzerland’s 8.5 million inhabitants aren’t citizens.

Several other measures were also on Sunday’s ballot, including one granting new fathers 14 days of paid leave. That, too, was approved.

©2020 Bloomberg L.P.