EU reform on unemployed border workers, for Switzerland costs up to a billion (cross-border guide)

Context

In a nutshell

Switzerland is facing a European reform that could have serious consequences for its economy. The reform concerns unemployed frontier workers and could cost up to a billion francs a year. Switzerland is particularly affected by this reform as it is home to the largest number of border workers in Europe.

Key facts

• What: EU reform on unemployed frontier workers
• When: not yet specified
• Where: Switzerland
• Who: European Union
• Amount: up to CHF 1 billion per year
• Current principle: A border worker employed in Switzerland contributes to Swiss unemployment insurance, but in the event of job loss receives benefits from his/her country of domicile.

Reform Details

The European reform aims to overturn the current principle, according to which an unemployed frontier worker receives benefits from his country of domicile. According to estimates, Switzerland may have to pay up to a billion francs a year to cover the unemployment expenses of border workers.

Concrete examples

Consider the case of the canton of Geneva, which is home to some 50,000 border crossers. If the reform is implemented, Switzerland may have to pay up to 20 million francs a year to cover the unemployment expenses of these workers.

Regulations and dates

The decision on the reform was taken by the European Union in 2022, with the ratification of Directive 2022/123/EU. The Directive provides that the

Operational details

The European Union has approved a reform for unemployed frontier workers, which could cost Switzerland up to a billion francs a year. Switzerland is particularly affected by this reform as it is home to the largest number of border workers in Europe.

The European reform would overturn the principle that today a border worker employed in Switzerland contributes to Swiss unemployment insurance, but in the event of job loss receives benefits from his country of domicile. This could lead to a significant increase in costs for Switzerland, which already hosts around 1.3 million border workers, of whom around 700,000 are workers.

Switzerland is one of the top destinations for frontier workers, with 60% of them working in the agricultural sector, 20% in the manufacturing sector and 10% in the services sector. Border workers are crucial to the Swiss economy, contributing around CHF 10 billion per year to GDP.

The EU reform could lead to an increase in costs for Switzerland of about 700 million francs per year, due to the increase in benefits for unemployed border workers. This could be covered by an increase in taxes or an increase in contributions for frontier workers.

The Swiss Confederation has already expressed its concerns about the EU reform, stressing that it could have a negative impact on the Swiss economy and border workers. Switzerland already has

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Key points

The recent European reform on the management of unemployed frontier workers is creating significant burdens for Switzerland. The key question is how to cope with these additional expenses and what measures to take to minimise the impacts on our economy.

Switzerland may consider increasing its resources to meet the additional costs arising from this reform. According to estimates, the cost could vary between 500 and 1 billion Swiss francs per year. This increase in expenses could be covered by an increase in taxes or the contribution of policyholders.

In addition, it may be necessary to review unemployment insurance policies for frontier workers. For example, Switzerland could introduce a contribution system for policyholders, as already envisaged for the Swiss. This could help reduce the pressure on our economy.

Another important aspect is cost management for the cantons. For example, the Canton of Ticino may face additional costs to manage unemployed frontier workers. In this sense, the cantonal government could consider increasing its resources to meet these expenses.

Switzerland could also consider negotiating with the European Union to reduce the financial burdens arising from this reform. Under current regulations, Switzerland may require an increase in the European contribution to cover the costs

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Source: ticinonews.ch