Brussels, 03/02/2016 (Agence Europe) - Bringing back controls on the borders would have an economic cost in excess of €100 billion for all of the countries participating in the Schengen zone, according to an analysis published on Wednesday 3 February by France Stratégie, a think thank directly attached to the cabinet of the French Prime Minister.
The study analyses the costs of ending the Schengen freedom of movement area under consideration of two scenarios. The first involves reduced controls of border crossings for private cars and spotchecks on trucks, which would slow down the traffic on the borders to a certain extent. The second describes reinforced controls of crossings in private cars and systematic checks on trucks, which would lead to crossing times twice as long as those in the first scenario.
According to the authors of the study, the short-term cost to the French economy would be between €1 and €2 billion, not including the additional budgetary costs for bringing back customs controls. Half of the costs would arise from reductions in tourist traffic, 38% from a negative impact on cross-border workers travelling to and from work and 12% from additional freight costs.
In the longer term, permanent and extended controls on the borders would reduce trade between the countries of the Schengen zone by between 10% and 20%. This would be equivalent to bringing in a 3% tax on trade between countries of the zone and would translate into a loss of at least 0.5% of GDP for France, or €10 billion, according to France Stratégie. For the countries of the Schengen zone, the impact is expected to be in the order of 0.8% of the GDP of the zone, or more than €100 billion. Other long-term effects which are difficult to put a figure on must also be taken into consideration, such as a loss of mobility for workers, a reduction of direct investments and of financial flows.
“Although estimates vary, the cost of non-Schengen will be very, very high”, commented European Commission spokesperson Margaritis Schinas. “Border controls as they function are going to cost us €3 billion if things continue as they are”, the President of the European institution, Jean-Claude Juncker, told the press in his 2016 address (see EUROPE 11469). (Original version in French by Mathieu Bion)