By Michael Shields and Angelika Gruber
ZURICH (Reuters) - Switzerland and the European Commission said on Monday they had come closer to agreeing a deal on Swiss efforts to curb immigration while preserving its access to the EU single market, and scheduled further talks next month.
Brussels insists on free movement of people as a condition for neutral Switzerland's joining the common market under bilateral accords. The arrangement has been put at risk by a Swiss referendum in 2014 demanding immigration quotas, which requires a law to be in place by February.
While both sides said any deal still needed work, Commission President Jean-Claude Juncker told reporters after meeting Johann Schneider-Ammann that he could live with a Swiss compromise proposal that would give hiring preference to local people, as long as this was agreed mutually with the EU.
"This will be possible without a doubt," he said, although he added he did not want to meddle in the Swiss political process and said open questions remained.
Still, he added: "After this talk, I am more optimistic than I was in recent weeks. Everything is going in the right direction."
Schneider-Ammann said he was encouraged by the discussion.
"We need a solution both sides can say 'Yes' to. I am confident we can do it," he said.
Any accord will be scrutinized for potential hints of what Britain might expect after its vote in June to leave the bloc, in large part to be able to limit immigration from the EU that critics say has put pressure on jobs, social services and schools.
Juncker acknowledged the issues were interlinked, calling Britain's Brexit vote "another element adding to the difficult issues we have to discuss with our Swiss friends".
The Commission, which faces years of similar negotiations on migration rules with Britain, has shown little inclination to accommodate Switzerland or budge from insistence the Swiss respect free movement rules or lose trade benefits.
Many in Brussels believe that any compromise with Switzerland would heighten demands from Britain.
Switzerland skirted a direct clash over immigration curbs this month when a parliamentary panel rejected the government's threat to impose unilateral quotas on foreigners next year in favor of the compromise.
The lower house addresses on Wednesday the plan to give local people hiring preference as a way to ease pressure on domestic job markets without infringing too much on EU free movement rules. The upper house is due to vote in December.
(Reporting by Michael Shields; Editing by Richard Balmfoerth)