The European Immigration Crisis
Cost of Shutting Schengen: Over €100B

In the wake of an unprecedented migrant crisis, many European nations have shuttered their borders, and some, such as Germany, are considering keeping them shut for up to two years. That move would amount to the de facto end of the open-borders Schengen Zone scheme, at least for the near future, and would carry serious costs. Reuters UK reports:

A permanent return to frontier controls in Europe would cost countries in the Schengen open-borders area about 110 billion euros (83 billion pounds) over the next decade, the French government’s official think-tank said on Wednesday. [. . .]

A study by France Strategie, a think-tank directly attached to the prime minister’s office, said the drop in cross-border tourism and trade brought on by a permanent end of the free-travel area would cost Europe 0.8 percent of economic output over 10 years.

Schengen is often hailed as a great success for peace and soft power, a policy that builds ties between nations that used to fight each other by allowing easy tourism—and so forth. And it does. But at its core, the Schengen system is one of the EU’s most important economic tools. Consider the industrial cities of Liege, Maastricht, and Aaachen. All three lie about 20 miles apart from one another. Yet because the first is in Belgium, the second in the Netherlands, and the third in Germany, crossing between them for meetings, deliveries, or even just a shopping trip would, without Schengen, involve multiple border checks. Multiply these inefficiencies by the number of similar such situations in Europe—44 percent of Luxembourg’s workforce is made up of commuters from other countries—and you have a serious economic cost associated with border controls.

This seems to be borne out by economic studies. The WSJ reports on figures from the European Commission:

The commission, the bloc’s executive arm, has calculated that the delay encountered by road-transport operations alone would amount to €3 billion per year, assuming each truck crosses one border and has an additional waiting time of one hour.

The commission also said the approximate cost for the express-parcels industry alone could be more than €80 million a year.The commission’s spokesman said on Wednesday that in-house think tank EPSC would come forward with an estimate of the total cost in the near future.

And, as the FT notes, “Several academic studies estimate that passport-free travel has boosted trade by 10 per cent to 20 per cent within the zone.”

Most European economies are not in a position to bear this sort of drag lightly. But given the chaotic nature of the refugee crisis as well as the concomitant security concerns—the lack of border checks between France and Belgium made it harder to track the Paris attackers, for instance—European governments may not feel they have much of a choice.

Day by day, it becomes clearer: Europe either needs to get its immigration situation under control, or watch much of the way of life it has built for itself disappear under its very eyes.

Features Icon
show comments
© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service