Bringing back EU border controls 'could slash bloc's GDP by up to €66bn'
Published 19/04/2016 | 02:30
The reintroduction of border controls in Schengen countries would cut up to €65.8bn from EU member states' combined gross domestic product, a new report has claimed.
Germany's respected Ifo Institute for international economic research, has examined the likely financial consequences border controls being re-erected across Europe.
It said that if such controls return across the Schengen area, then between 0.19pc and 0.47pc could be cut from the EU member states' GDP.
Ireland and the United Kingdom aren't among the Schengen countries which abolished passport control at their borders.
The agreement was implemented in 1995, initially in seven countries, before being extended.
Among the other countries that aren't included in it are Bulgaria, Croatia, Cyprus and Romania. Non-EU states including Iceland and Norway are also members.
But the migrant crisis has brought the open border system into focus, particularly in Greece.
Within two weeks, the European Commission wants Greece to fine-tune a plan for improving its external border controls.
If such a plan isn't completed satisfactorily, the EU could extend border controls on travellers from Greece to the EU until later this year, in an effort to prevent migrants from leaving Greece to go to other member states.
With other Schengen countries including Germany and Austria having introduced border controls.
Those controls can't be extended unless the European Commission determines that one Schengen country does not have sufficient controls on its external border.
Gabriel Felbermayr, a director of the Munich-based Ifo Centre said that, at the higher end, the reintroduction of the border controls in Schengen area would result in up to €130.28 per capita being cut from the EU's gross domestic product.
At the lower end of calculations, it would be €52.74, or a total of €26.6bn.
"These costs account for only a small part of those sums that could arise through uncontrolled mass migration," he said.
But Mr Felbermayr said he does not believe the Schengen area will collapse completely.
He said it's far more likely that controls will only be introduced at borders that are on refugee routes.
He added that based on that level of border control, GDP across the region would be cut by between 0.06pc and 0.11pc, or between €9bn and €15.4bn.
The Ifo Institute said that person controls at borders act like a customs duty of 0.5pc on goods trade and of 0.8pc on trade in services.
Experiences at the US borders with Canada and Mexico show that trucks have a 20-minute wait on average, the institute added.
Last week, the European Commission gave Greece until April 26 to clarify elements of an action plan the country's government has drafted for dealing with the migrant crisis.
The action plan already provided to the Commission details how Greece will provide reinforced staff numbers for registration procedures, an expansion of reception facilities, an upgrading of IT systems, and the establishment of an effective coastal surveillance system.
But the Commission said that particular concerns remain regarding the action plan in relation to the lack of detailed timeframes for the actions to be completed, and a lack of information about the authorities responsible for implementing them.
"I welcome the continued efforts of the Greek authorities to improve the situation, which we support," said Commissioner for Migration and Home Affairs Dimitris Avramopoulos last week.
"However, I also need to underline that all of the Council and Commission recommendations need to be met to face the unprecedented pressure at Europe's external borders," he said.