ZURICH (Reuters) - Switzerland's defence minister said it was "unthinkable" that his country's accords with the European Union would be terminated as result of a referendum to curb immigration, saying threats of retaliation by the bloc were overblown.
Swiss voters this month narrowly backed a proposal to curtail immigration, a move that could violate a free movement of citizens pact with the 28-member bloc that came into force in 2002.
The treaty is part of a package of seven accords that stand or fall together and cover economic and technological cooperation, public procurement, and a host of other areas
European Commission President Jose Manuel Barroso has warned the vote will have "serious consequences" for ties with the EU, which has already postponed talks with the Swiss on multibillion-dollar research and educational schemes.
"The EU and Switzerland both have an interest in coming up with sensible solutions," Ueli Maurer, a member of the right-wing Swiss People's Party (SVP) that spearheaded the proposal, told the Schweiz am Sonntag newspaper.
"It's unthinkable that the bilaterals will be terminated, whether by Switzerland or by the EU. Both sides benefit from them."
Maurer told the paper he did not expect much progress ahead of elections to the European Parliament in May, but expects "constructive" talks afterwards.
Other EU leaders have struck a more conciliatory tone. German Chancellor Angela Merkel has warned against retaliation, saying Europe's own interests were best served by waiting to see how the Swiss implement the referendum result.
The Swiss government has said it will draw up an implementation plan by the end of June with the aim of drafting a law by the end of the year. It must write the vote into law within three years.
The uncertainty arising from the vote has unsettled companies that depend heavily on foreigners to fill jobs and benefit from open access to the European Union - Switzerland's biggest trading partner, buying goods worth 110 billion Swiss francs ($122 billion) in 2013.
The number of foreigners living in Switzerland rose by 61,570 people last year, two thirds of whom came from European Union countries, official statistics show.
Politicians and business leaders have scrambled to put forward suggestions to limit the impact on the economy.
Philipp Mueller, head of the Swiss Liberal Democrats (FDP), told the NZZ am Sonntag newspaper that certain sectors in which there is a shortage of skilled labour should be excluded from a requirement to give Swiss nationals preference when hiring.
Such a system would reduce the amount of bureaucracy for many firms, said Mueller, whose party, which has two seats in the five-party seven-member cabinet, opposed the proposal.
In other sectors where there is high unemployment, such as the hospitality industry, employers would have to get proof that they have looked for staff in Switzerland before getting approval to hire a foreigner, he said.
Hans Hess, president of Swissmem, which represents the electrical and mechanical engineering industries, suggested in an interview with the SonntagsBlick newspaper that quotas could only take effect once immigration passes a certain threshold.
"Our population grows around 1 percent each year due to immigration. This is an exceptional situation. Because of this the EU should concede to regulating the high levels of immigration in some kind of way," Hess said.
(Editing by Alison Williams)