Switzerland faces difficult talks with its European Union neighbors after voters narrowly approved an immigration referendum that effectively scraps a longstanding agreement with Brussels guaranteeing freedom of movement across the continent.

A bare majority of 50.3 percent voted in favor of a rightist party-backed referendum to cut immigration quotas and require that Swiss nationals be given priority in hiring.  In doing so, voters rebuked the Swiss government, the banking industry and business leaders, who had lobbied against immigration restrictions, warning that such a move could endanger Switzerland’s prosperity.  Many EU officials agree, saying doing business with the Alpine has now become more difficult.

Switzerland is not a member of the European Union, but has signed deals agreeing to most of the EU’s principles.  EU Vice President Viviane Reding said that Switzerland could not “pick and choose” among its agreements with the bloc, adding, “it is a whole package they have signed up to.”  She said that the Swiss government must now explain how it intends to apply the results of the referendum.