The decision by Swiss voters to cap immigration has imperiled relations with other European states, as it has burnished efforts by right-wing populists intent on spreading an anti-foreigner political agenda.
On Sunday, the Swiss narrowly backed a proposal to curb the country's open-borders treaty with the 28-nation European Union, of which it is not a member. Voters were stoked by fears of overpopulation and Europe's rising numbers of Muslims.
The vote's impact is echoing well beyond the country's Alpine peaks, bringing retaliatory threats from leaders across the continent and worries that the move could shake the European economy.
People are uneasy about unlimited freedom of movement
GERMANY’S WOLFGANG SCHAEUBLE
The vote in Switzerland - home to Nestle, the world's biggest food company, and international drugmakers Roche Holding and Novartis - could make it difficult to hire foreigners, some business leaders warned.
The government has three years to implement the new rules, which will primarily affect workers from the EU, many of them highly qualified.
About 20 per cent of Swiss residents are foreigners and 45 per cent of employees in the country's chemical, pharmaceutical and biotech industry are not Swiss.
Officials in Brussels, the EU's administrative capital, warned that the vote could threaten Switzerland's access to the 500 million consumers of the bloc, which stretches from Greece to Ireland and from Latvia to Portugal, and is anchored by economic powers Germany and France.
While not a member of the EU, neutral Switzerland signed a sweeping treaty with its neighbours in 1999. The fear and loathing over immigration that drove the referendum can also be seen in countries across the region.
"Switzerland is playing the role of a pioneer for the whole of Europe now," Toni Brunner - chairman of the Swiss People's Party, which backed the referendum and has launched an initiative to ban mosque minarets - told the Neue Zuerchernewspaper. "EU open borders, in the form they exist in today, will have to be discussed."
Hard economic times persist in much of Europe, the legacy of a multi-year debt crisis. And that leaves immigrants vulnerable to public wrath from Britain to Greece. Hungary's far-right Jobbik party - anti-immigrant, anti-Roma and anti-Semitic - has moved from the political fringes into the halls of parliament and is campaigning heavily before April elections.
Paramilitaries with the Golden Dawn in Athens have launched street battles against immigrants, staging a number of well-documented attacks. The flow of Syrian refugees into Europe has also helped boost the popularity of anti-immigrant nationalists in Bulgaria.
Advocates of a more united Europe are bracing for European Parliament elections this May, when anti-immigrant nationalists from France, Holland, Britain, Finland and elsewhere are expected to capture as many as one-third of the seats.
With many far-right European parties adopting protectionist stances, observers note that substantial victories for nationalists could jeopardise European parliamentary approval of a sweeping free-trade accord that is now being negotiated with the United States.
"Immigration is the big theme of 2014 in Europe," said Mats Persson, director of Open Europe, a think tank that focuses on EU changes. "One of the big risks is that the European Parliament becomes quite polarised after the May elections, filled with federalists who want a closer union in Europe and nationalists who want exactly the opposite."
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