The EU’s multi-billion research programme Horizon 2020 and its Erasmus student exchange with Switzerland hang in the balance following a Swiss vote over the weekend in favour imposing quotas on EU migrants.

The two would automatically be suspended should Switzerland move to include limits on EU’s newest member state, Croatia. Both agreements are conditioned on free movement.

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Croatia is scheduled to sign off on a reciprocal free movement agreement with Switzerland on 1 July. All other member states have a similar agreement.

“Croatia needs to be added and the direct link, which has been made, is to the current negotiations on research and on Erasmus,” a EU source told reporters in Brussels on Monday (10 February).

“This [Croatia] was meant to be relative technicality, I fear that this may now pose problems on the Swiss side […] we understand that they may now not feel they will be able to proceed with this legislation,” added the source.

All EU nationals need special permits to work in Switzerland.

The permit restrictions is set to be lifted for 25 member states at the end of May but may continue until May 2019 for nationals of Romania and Bulgaria.

Meanwhile, Swiss authorities are negotiating the next EU student funding programme over the 2014-2020 period.

Over 2,700 Swiss students benefited from the programme between 2011 and 2012. Another 3,150 are set to benefit for the 2014-2014 academic year.

Possible implications for EU research funding are also far-reaching.

Calls under the Horizon 2020 research programme, which runs from 2014 to 2020, opened in December.

At least three EU member states or associated countries, like Switzerland, are needed to form a consortium partnership in order to be eligible for the research grants.

Blocked negotiations on Horizon 2020 means Swiss researchers and companies, which tendered for calls in December with other member states, would no longer be valid.

Swiss involvement under the EU’s previous seven-year research funding programme, FP7 (framework research programme 7), is extensive.

They participated in around 3,000 EU-funded research projects and are on track to receive some €1.8 billion in funding. Around €500 million have gone to more than 300 European Research Council grant holders.

Negotiations on the association of Switzerland to Horizon 2020 are ongoing, with the next round of talks originally scheduled to take place this week, now postponed.

An EU source told this website that on the basis of past performance the Swiss research community would be set, under normal circumstances, for even more funding.

“First, however, we need to get an agreement, including on the budget contribution, and the Commission has been clear about the conditions linked to free movement,” noted the source.

Switzerland, for its part, contributed around €1.6 billion to the EU and Euratom budgets.

Meanwhile, the EU is moving ahead with a separate so-called institutional framework pact with Switzerland. Both are bound by more than hundred bilateral agreements.

The framework is supposed to clarify outstanding institutional issues like dispute-settlement mechanisms.

Insiders say the EU legislative machine and deal-making with Switzerland will continue on the institutional framework as normal until the Swiss government puts forward its anti-EU migrant bill.

Switzerland is the EU’s third largest trading partner

Over a million EU citizens live in Switzerland and another 230,000 cross the border daily for work. About 430,000 Swiss live in the EU.