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Photographer: Fabrice Coffrini/AFP via Getty Images Photographer: Fabrice Coffrini/AFP via Getty Images

The Swiss government laid out details of how it wants to reduce the number of newcomers from the European Union, risking a worsening of relations with the 28-country bloc that could deal a blow to the economy.

Switzerland will use a “safeguard clause” that will take effect if immigration reaches a certain threshold, the government in Bern said in a statement on Friday. It will seek a solution acceptable to the EU, yet will implement the restrictions unilaterally if no mutual agreement can be reached.

“A specific threshold will be set for the immigration of citizens of EU and European Free Trade Agreement states, which, if exceeded, would lead to quantitative limits and quotas being introduced the following year,” the Swiss government said in the statement.

The government “will specify the types of permit and purposes of residence to which the limits and quotas will apply,” it also said, without giving further details on how the new system would work.

The Swiss decided to end unrestricted immigration for citizens of EU countries in a 2014 referendum, giving the government until early 2017 to implement the change. EU officials have said in the past they won’t renegotiate the matter.

“It is difficult but we continue the consultations, as agreed” between European Commission President Jean-Claude Juncker and Swiss President Simonetta Sommaruga in their latest conversation, the Commission said in an e-mailed statement.

Economists and entrepreneurs have warned that implementing a quota system would damage an economy that’s benefited from high immigration in recent years. Nearly a quarter of Switzerland’s 8.2 million people aren’t citizens.

Swiss Newcomers

The number of newcomers rose strongly in the decade after Switzerland and the EU agreed on free movement, feeding complaints about a lack of affordable housing and overcrowded public transport. Last year’s net influx from the EU was 60,000 persons, according to Swiss statistics office data.

Relations between Switzerland and the neighboring EU are governed by a set of treaties covering topics such as the free movement of persons, agriculture, education and border controls. They contain a “guillotine” clause that will nullify all if one is struck down.

That could prove a handicap for landlocked Switzerland, for whom the EU is the top trading partner.

According to studies presented to the government, the Swiss gross domestic product would be between 4.9 percent and 7.1 percent lower in 2035 if Bilateral Agreement I -- which includes the free movement of persons, agriculture, research and civil aviation -- were nullified. That works out to an average reduction of 32 billion francs ($32 billion) per year in economic output, they found.

( Updates with comment from Commission in sixth paragraph. )