GENEVA - The European Union warned it will review ties with Switzerland after the non-member Alpine country voted Sunday to restrict EU immigration in a closely-fought referendum.
Final results of the plebiscite showed 50.3 percent of voters backed the "Stop Mass Immigration" plan pushed by Swiss right-wing populists.
The fall-out from the result could sink a raft of deals with the EU, including on the economic front.
Switzerland is ringed by EU member countries and does the bulk of its trade with the 28-nation bloc, but has remained steadfast about not becoming a member.
The European Commission said it would assess EU ties with Switzerland, raising the prospect of restricted trade or other retaliatory steps.
"The EU will examine the implications of this initiative on EU-Swiss relations as a whole," it said a statement.
EU foreign ministers were scheduled to meet Monday in Brussels but it was not clear whether the Swiss vote would be added to the agenda.
Wolfgang Schaeuble, finance minister of Germany, Switzerland's top trade partner, said the result "is going to create plenty of problems for Switzerland in a host of areas". But he said it was also a warning sign of European globalisation fears.
Swiss Foreign Minister Didier Burkhalter said he planned to tour European capitals to explain the vote and seek a solution, starting with Berlin.
"The people are sovereign, and a healthy system doesn't force the public to follow political authorities with outsized powers," Burkhalter said.
The Swiss government and a broad swathe of economic lobby groups fearing the EU fall-out had battled the immigration curb plan.
But under Switzerland's system of direct democracy, voters have the last word on a huge range of issues.
The French-language newspaper Le Temps noted how French-speaking areas and larger cities voted against the immigration curbs, while German-speaking and rural areas generally voted for them.
'We are ashamed'
Hundreds of people came out to demonstrate against the referendum result in the capital Bern and in the city of Lucerne. "We are ashamed," shouted protesters in Bern.
The Swiss government said it would examine over coming weeks how to "recast relations" with the EU, but stressed that current immigration rules would remain in place until the new ones were drawn up.
The vote obliges the government to renegotiate within three years a 2007 deal struck with Brussels that gave most EU citizens free access to the Swiss labour market.
It was one of a series of accords reached in 1999 after five years of talks that were seen as a way for Switzerland and the EU to enjoy access to each other's markets without Switzerland having to opt for full EU membership.
Brussels, though, has warned that Switzerland cannot cherrypick from the binding package of deals, which were themselves approved in a 2000 referendum.
Besides free movement of labour, the pacts include equal access for Swiss and EU firms to public procurement tenders, smooth trade in farm goods, air transport and other sectors.
There have been warnings that ripping up those deals could also affect Switzerland's membership of Europe's passport-free Schengen travel zone.
It could also hit talks aimed at giving Swiss financial players more access to EU markets, and to prise open Switzerland's banking secrecy, a hot topic as EU countries try to crack down on tax dodgers.
Such fears failed to faze the Swiss People's Party (SVP), which piloted the referendum.
Hawkish about sovereignty, it claims the country has been swamped by migrants.
"The people have taken back their destiny over immigration," said party ideologue Christoph Blocher, while leader Toni Brunner hailed "a turning point in our immigration policy".
Tough rules on citizenship
The SVP says that with 80,000 EU citizens arriving per year -- more than the 8,000 predicted before the rules were liberalised -- the nation of eight million people needs to apply the brakes.
It claims that EU migrants undercut Swiss workers' salaries, and that overpopulation has driven up rents, stretched the health and education systems, and overloaded the road and rail networks.
Immigration and national identity are traditional political themes in a country with a long history of drawing foreign workers and yet some of Europe's toughest rules for obtaining citizenship.
But over recent years, the proportion of foreigners has risen from around one-fifth of the population to roughly a quarter.
There are around a million EU citizens in Switzerland, while some 430,000 Swiss live in EU member states.
The majority of recent immigrants are from neighbouring Germany, Italy and France, as well as Portugal.
The new measure will leave it up to authorities to set quotas for foreigners' work permits per sector.
Critics say restricting the hiring of EU citizens will hamper the Swiss economy, which enjoys virtually full employment but has an ageing population, and it could also hurt trade with a disgruntled EU.
"This is a bad result. Switzerland needs good relations with the EU," said Paul Rechsteiner, a Socialist lawmaker and trade union official.
The national employers' federation warned that "period of uncertainty has begun for the Swiss economy, and that is not a good thing".
The result was hailed by eurosceptics within the EU who want to rein in immigration among its member states, notably from eastern to western Europe.
Spain's centre-left El Pais daily said the vote "reflects the populist and xenophobic agitation sweeping the Old Continent less than three months before the European elections".
© 1994-2014 Agence France-Presse