COPENHAGEN: The strain of the ongoing migration crisis has sparked fears the EU’s much celebrated passport-free Schengen travel zone could collapse. A new study has claimed that if the Schengen was to dissolve, it could cost the EU US$1.55 trillion (€1.4 trillion) over the next decade.
The research, undertaken by German think tank, the Bertelsmann Foundation, claimed that under the worst case scenario, the reintroduction of border controls would push up import prices by three percent, which would lead to nearly 1.5 trillion worth of trading losses between 2016 and 2025.
Under this scenario, Germany and France would be among the hardest hit, losing hundreds of billions of euros in trade over the decade-long period.
Even under the least severe estimate, which would see import prices rise by one percent in the event of the Schengen collapsing, researchers claimed the EU would stand to lose US$518 billion (€470 billion).
“If border controls are reinstated within Europe, already weak growth will come under additional pressure,” Bertelsmann Foundation President Aart De Geus said.
Researchers say that reintroducing border controls within the EU would increase the amount of time it takes for goods to be transported across borders, ultimately raising costs for consumers and companies.
Any such developments would also increase costs for some of the EU’s biggest traders, with the Chinese and US economies also expected to take a significant hit in the event of the dissolution of the passport-free travel zone.
The Schengen zone, which is an agreement among 22 EU member states and four non-EU European countries, was developed three decades ago and allows for the free passage of people and goods across national borders.
While the development is regarded by many as the EU’s greatest achievement, there have been suggestions the Schengen zone may collapse given the ongoing migration crisis.
Given the EU’s inability to agree upon a common approach to the crisis, a number of countries have taken action into their own hands and reintroduced border controls to better manage the flow of people coming into Europe.
This has raised concern among top officials in Brussels that some of these arrangements may continue on a permanent basis, effectively putting an end to the EU dream of having a borderless Europe.
