The EU approved a new Swiss law on Thursday (22 December) that will allow EU citizens to work in Switzerland, opening the way to solve a two-year crisis.

An EU-Swiss joint committee, where all 28 EU states are represented, said that the law passed last Friday in the Swiss parliament would limit the effect of a 2014 referendum to introduce immigration quotas into the Swiss constitution.

Student or retired? Then this plan is for you.

One of the consequences of the referendum would have been to limit the free movement of EU workers to Switzerland, a member of the passport-free Schengen area.

In retaliation, the European Commission suspended Switzerland's participation in the EU research and student programmes, Horizon 2020 and Erasmus+.

Since the referendum, Brussels and Bern have been discussing to find how legislation to implement the constitutional amendment could respect both the outcome of the popular vote and EU free movement rules.

Last Friday, the Swiss parliament adopted a bill that gives priority to Swiss-based job seekers - Swiss nationals and foreigners registered in Swiss job agencies - but which avoids quotas on EU citizens.

'Progress in relations'

Also on Friday, the Swiss government signed an agreement extending the free movement of workers principle to Croatia, which joined the EU in 2013. The accord, which will come into force on 1 January, had been pending as a consequence of the referendum result.

After Thursday's meeting, the commission welcomed "progress in relations between the European Union and Switzerland”, but said it was still waiting to see how the new law will be implemented.

"The implementing order will have to provide certain clarifications and guarantees on key points," it said in a statement.

"Questions about access to information about job vacancies and full respect for the rights of frontier workers are particularly important,” it added.

The EU executive re-established Switzerland's participation in Horizon 2020 from 1 January and said negotiations on its participation in the Erasmus+ would also resume.

Commission president Jean-Claude Juncker said in the written statement that "2017 could be a milestone in the development of closer relations between the European Union and Switzerland, with a view to enhancing still further the vitality of our area of freedom - of all forms of freedom - to the benefit of all our citizens."

'All forms of freedom'

Juncker's mention of "all forms of freedom" is a reminder that for the commission, the Swiss negotiations could have created a negative precedent for Brexit talks, in which the UK is also likely to seek EU migrant curbs..

One of Juncker's spokeswomen said earlier this week that the commission made a “tireless effort to find a compromise" and suggested that the Swiss government had little choice but to agree to the EU demands.

"The commission not only accompanied the process, but it also steered it a little to ensure it went in the right direction," said Mina Andreeva.

The Swiss government now has to find a way to square the newly adopted law with the constitution as modified by voters.

One of the solutions it presented on Wednesday would be that the constitutional amendment does not apply to "wide-ranging international agreements”, such as the EU-Switzerland agreements and the European convention on human rights.