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(Reuters) – The European Union said on Sunday it has postponed negotiations with Switzerland on its participation in multibillion-dollar research and educational schemes in the latest fallout from a shock Swiss vote in favor of immigration curbs. The decision follows Switzerland’s announcement that the result of last week’s referendum on immigration means that it will not be able to sign a labor market pact with new EU member Croatia on July 1 as planned.

European Commission President Jose Manuel Barroso has warned that the narrow Swiss vote to restore quotas for migrants from the EU in breach of an accord with Brussels, would have “serious consequences” for relations between the wealthy Alpine nation and the 28-member union surrounding it.

In one immediate consequence, the EU’s executive Commission said it was postponing talks on Swiss participation in both the EU’s 80-billion-euro ($109 billion) Horizon 2020 research program and its 14.7-billion-euro Erasmus+ educational exchange program. Both schemes cover the period from 2014 to 2020.

A Commission spokesman said there was a close link between Swiss participation in Horizon 2020 and Erasmus+ and the planned Swiss agreement with Croatia as the EU schemes involved the free movement of researchers and students.

“The protocol (with Croatia) has not been signed yet. Given the circumstances and in the absence of a clear political signal to do so, upcoming negotiation rounds have been postponed until Switzerland signs the protocol,” he said.

Swiss government spokesman Philipp Schwander said earlier on Sunday that Switzerland could not sign the labor market pact with Croatia in the agreed form “due to the new constitutional provision provided by the February 9 vote.” He said Switzerland was still keen to seal the deal with Croatia in a way that took the vote into account and did not discriminate against Croatian workers. The referendum, backed by the right-wing Swiss People’s Party (SVP), has sent Swiss diplomats scrambling to contain the damage in Brussels.