THE HAGUE: Reinstating border controls in Schengen countries would cause a cumulative structural GDP loss of 0.7 percent or 110 billion euros (123 billion U.S. dollars) for the European Union (EU) by 2020, said the Netherlands Bureau for Economic Policy Analysis (CPB) in its annual report published on Wednesday.
The Netherlands, due to its greater trade openness, would suffer a greater loss, a decrease in GDP of 1.3 percent or 9 billion euros (10 billion U.S. dollars) over the five-year period, said the CPB in its central economic plan 2016.
“Reinstatement of border controls in Schengen countries will have a negative impact on the economy, as it will restrict trade flows via the higher costs related to trade and longer waiting times at the borders. Negative effects can also be expected from the restrictions on the free movement of people between these countries,” the report added.
The Dutch government’s macroeconomic policy unit forecast a 2.9-percent growth for the world economy this year and 3.2 percent for the next.
In the eurozone, growth is progressing more slowly, with 1.6 percent this year and 1.7 percent in 2017. The Dutch economy is projected to grow by 1.8 percent this year and 2.0 percent next year.
