Reintroducing Border Controls Would Be Costly for Europe

Europe’s system of open borders is on the brink of collapse, a crisis that would deal a hefty blow to the region’s still fragile economy.

The return of border checks and passport controls could cost Europe as much as 100 billion euros ($110 billion) over a decade, a new study has found.

Researchers for the French government say the end of border-free travel could knock 0.8% off Europe’s GDP by 2025 in a worst case scenario.

The study looks at what would happen if the 26 countries in the Schengen area permanently reintroduce passport controls and checks on cars and trucks.

The Schengen area includes four countries outside the European Union — Iceland, Lichtenstein, Norway and Switzerland. Six EU countries are not part of the zone — they have either opted out of the agreement, or are still waiting to be admitted.

Freedom of movement is one of the EU’s key principles. But an influx of migrants fleeing war and poverty has created tensions between the bloc’s members.

More than a million refugees crossed into Europe in 2015, according to aid agencies. Sweden, Denmark, France, Austria and Germany have already temporarily suspended the Schengen agreement and are now checking documents of people attempting to enter at some border posts.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza