Swiss let in Croat workers, seek to ease EU immigration row

ZURICH (Reuters) - Switzerland said on Wednesday it would let in workers from the European Union's newest member, Croatia, in a move seen as a bid to placate the bloc following a row over Swiss immigration curbs. In a shock referendum result in February, Swiss voters decided to reimpose quotas on immigrants from the European Union - triggering threats of "serious consequences" from EU officials who froze negotiations on a number of key treaties. One of the first concrete casualties of the plebiscite was a planned labor accord with Croatia, which Berne said it would no longer be able to sign. But on Wednesday, the Swiss government said it had found a way to give Croats access to its labor market under a separate quota system. "Today's decisions demonstrate that the Federal Council is pursuing its strategy to push ahead with and coordinate current and future negotiations on various European policy dossiers to achieve the best possible outcome for Switzerland," the government said in a statement. There was no immediate comment from the European Union on whether it was now ready to resume negotiations on a cross-border electricity agreement, a multi-billion-dollar research program and other stalled treaties. February's popular vote, backed by the right-wing Swiss People's Party (SVP), embarrassed many in the Berne government and sent diplomats scrambling to contain the damage in Brussels. Switzerland is not a member of European Union but has signed treaties with the 28-nation bloc, partly to ensure its access to European markets. Free movement of labor is one of the EU's fundamental principles and EU officials had told Switzerland it could not cherry-pick the benefits of market access without accepting the obligations it entails. Croatia's government welcomed the Swiss decision to let workers in by July and recognize their qualifications. Switzerland also agreed to give Croatia 45 million Swiss francs ($50.93 million) as an "enlargement contribution" - a phrase used for spending aimed at reducing economic and social disparities in the bloc. "We are satisfied that the Swiss have fulfilled what they promised. This is the basis for us to give a green light for further talks on Switzerland's new institutional arrangement with the EU," a Croatian foreign ministry source said. The Swiss government has three years to work out how to put the referendum vote on immigration into effect. Ratings agency Moody's has said the immigration curbs would harm the Swiss economy and its banking sector in particular. ($1 = 0.8836 Swiss francs) (Reporting by Katharina Bart; additional reporting by Zoran Radosavljevic in Zagreb; Editing by Andrew Heavens)