Immigration Debate Rages in US and Europe; EU Strikes Back at Switzerland

Debate over immigration rages in both the US and Europe. Let's take a look at the US first. On January 30, House Speaker John Boehner Released Immigration Principles.

Speaker John A. Boehner of Ohio released his long-awaited immigration overhaul principles Thursday afternoon, for the first time laying out a broad GOP-backed pathway to legalized status for undocumented immigrants.

Boehner and other top Republicans have been talking about it for months, but the document lays out a draft for how Republicans want to take on the contentious issue, which is splitting their party at their annual retreat here. The party will discuss and potentially amend the document, and it is possible that it will not be accepted at all.

The principles stress interior and border enforcement must be enacted before mechanisms to legalization can begin and notes that Republicans do not favor a “special pathway” to citizenship for anyone who illegally traversed the border into the United States. However, it does present options for those roughly 11 million immigrants living in the country.

“These persons could live legally and without fear in the U.S., but only if they were willing to admit their culpability, pass rigorous background checks, pay significant fines and back taxes, develop proficiency in English and American civics, and be able to support themselves and their families (without access to public benefits),” the document states. “Criminal aliens, gang members, and sex offenders and those who do not meet the above requirements will not be eligible for this program.”

Boehner Blasted from the Right on Immigration Overhaul

Those restrictions seem pretty severe. Nonetheless, a week after Boehner laid out his principles, the Tea Party wing of Republicans Denounced Immigration Reform.

As House Republicans embarked late last month in luxury buses for their retreat on the Eastern Shore of Maryland, their ears were already ringing with angry phone calls. Heritage Action, the political arm of the conservative Heritage Foundation, was imploring its members to flood the Capitol with warnings to accept “no amnesty.”

The day before, the Tea Party Patriots group set in motion 900,000 automatic phone calls in 90 Republican House districts, connecting tens of thousands of voters to their members of Congress. The hashtag #NoAmnesty blazed across Twitter. About the same time, FreedomWorks, another anti-tax, limited-government group, was pulling in signatures on its “fire the speaker” petition against the House speaker, John A. Boehner.

When House Republicans gathered on Jan. 30 to actually read and discuss Mr. Boehner’s principles on immigration reform, his was already a losing battle.

“Why did we even put these out there?” asked Representative Tom Price, a respected conservative Republican from Georgia, urging leaders to set aside the issue until after the November elections.

A week later, Mr. Boehner shelved the issue, declaring Thursday that he could not move forward with a comprehensive overhaul of the nation’s immigration laws until President Obama won the trust of the Republican conference.

“I would’ve been surprised if Boehner didn’t do that,” said Representative John Fleming, Republican of Louisiana and a leader in the opposition to immigration legislation. “Few things in politics are as obvious as this one. That’s why there was a collective shrug in conservative leadership” when the speaker all but declared the measure dead.

Since October’s government shutdown, Mr. Boehner has been in open warfare with outside conservative groups, dealing them one loss after another: reopening the government, winning overwhelming passage of a budget deal they opposed, then a trillion-dollar spending bill they loathed, and this week, securing a new agriculture law that largely kept the food stamp program intact over the objections of conservatives.

But on immigration, the groups flexed their collective muscles. Heritage Action and the Heritage Foundation rushed to claim credit. So did Tea Party Patriots and the conservative activist L. Brent Bozell and his ForAmerica group, which called for a clean sweep of the House Republican leadership if it moved forward on the issue.

“I think he feels the heat and has felt the heat,” Mr. Fleming said of the speaker. “There has been a lot of talk that if the speaker had moved forward and forced members to vote, that would end his speakership. There was not much point in that.”

Let's now turn the spotlight on immigration battles in Europe.

Swiss Voters Approve Immigration Curbs

On February 9, Swiss Voters Narrowly Approved Curbs on Immigration.

A narrow majority of voters in Switzerland approved proposals on Sunday that would reintroduce restrictions on the number of foreigners who are allowed to live and work in the country, a move that could have far-reaching implications for Switzerland’s relations with the European Union.

Switzerland, which is not part of the European Union, has one of the highest proportions of foreigners in Europe, accounting for about 27 percent of the country’s population of about eight million. Many job seekers have arrived from countries hit hard by the European economic crisis.

Immigration has become a polarizing issue across Europe. More prosperous nations are growing worried that their welfare systems cannot handle an influx of workers from the economically weaker Eastern European countries.

Far-right parties with anti-immigrant platforms in France, the Netherlands and Norway have gained strength in recent years, and there have been sharp debates in Britain and Germany over limiting the number of immigrants from Bulgaria and Romania because citizens from those countries gained full access to European Union job markets this year.

The proposal passed with the support of 50.3 percent of those who voted; 56 percent of eligible voters cast ballots. The largest cities, Zurich and Basel, rejected the vote, and smaller cities and rural areas supported it.

The Swiss People’s Party has been particularly skillful at using such popular votes to push for immigration controls in recent years. After growing pressure, the government reintroduced quotas in 2012 limiting the number of work permits that could be issued for European Union citizens.

The vote on Sunday also comes at a time when Switzerland is under intense pressure from France, Italy and other European countries that want its banking system to become more transparent. Last year, Switzerland and the United States reached a deal to punish Swiss banks that had helped Americans evade taxes.

“It is far more than a political slap in the face,” the conservative newspaper Neue Zürcher Zeitung wrote in an editorial published on its website after the result was announced. “The Yes to the ‘Massive Immigration Initiative’ is a censure that is comparable to No to the European Economic Area.

EU Strikes Back at Swiss Curbs

Stating Switzerland needs the EU more than vice versa, the EU is hitting back at Switzerland.

Via translation from El Pais, EU imposes penalty on Switzerland for its immigration policy.

The Swiss referendum to halt European immigration has already had its first consequences. The European Commission halted negotiations with Switzerland to determine their participation in major research programs and the Erasmus project worth an estimated €80 billion.

Brussels had warned that freedom of movement between the two governing territories since 2002 was not negotiable and that if the Swiss government renounced welcome Croats, as had been committed to The rest of negotiations would decay.

The Commission spokesman has confirmed that negotiations have stalled. "Given the circumstances of the referendum and in the absence of a clear political signal the Swiss authorities postponed the meeting," said the representative of the EU executive.

The European Union had warned that an obstacle to free movement would have consequences in other integration agreements signed between the two territories. The EU may repeal or renegotiate agreements that allow Swiss products advantageous access to the EU market. 60% of Swiss export go to EU countries.

Hallmarks of Deflationary Times

Trade wars, immigration battles, and especially beggar-thy-neighbor competitive currency debasement tactics are hallmarks of deflationary times.

When jobs are plentiful, such pressures are minimal. Now, every country seeks advantages for itself, hoping to raise exports.

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Further Deflation Discussion

For further deflation discussion please see ...

• Deflation Will Return: Europe First, Then US; Global Supply Arbitrage
 
• Bernanke Wants 2% Inflation in a Deflationary World; Who Pays the Price?
 
• Deflation Theory Reality Check

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com