Tighter European border controls will take an enormous economic toll
Border-free movement in Europe hits a roadblock “That’s why the trucks go nonstop”
Peering through his rain-lashed windshield, Zoltan Unczorg alternates edgily between the brake and gas pedal of his 18-wheeler truck. “It’s very tiring,” the sturdily built Hungarian says as he crawls along in a line of vehicles approaching the Austria-Germany border.
After more than eight hours on the road carrying fan parts from Tapolca, Hungary, Unczorg has no patience for delays. And this day is better than usual. He’s had to deal with waits of about four hours at this checkpoint, set up in September to block migrants from entering Germany on the A3 highway. It’s a route he plies daily for electric-motor maker EBM-Papst. “The worst was last summer, when migrants were walking on the highway heading for Germany,” he says. “It was too dangerous to drive quickly. You could hit them by accident.”
The delays Unczorg must endure stem from the erosion of a system that took 30 years to evolve and has allowed borderless travel across 26 countries. Restoring widespread border controls would be a blow for the most visible achievement in the 60-year quest for a united Europe, conceived in the rubble of World War II: the erasure of national boundaries.
Free movement is a given in what’s called the Schengen Area, named for the Luxembourg town where the 1985 treaty dismantling border controls was signed. Now, Austria, France, Germany, and Sweden have reintroduced some border checkpoints in response to Europe’s biggest refugee crisis since the war. About 1 million migrants arrived in Greece and Italy in 2015, and many have moved north. In addition to stemming the flow of people, the checkpoints are meant to deter terrorist attacks and to deflate the growth of anti-immigration movements.
The economic cost of abandoning Schengen would be massive. A permanent return to border controls could cost the European economy €470 billion ($532 billion) in gross domestic product growth over the next 10 years, according to the Bertelsmann Foundation, a German think tank. That’s like losing a company almost the size of BMW every year for a decade.
The open borders power an economy of more than 400 million people. Companies in Germany’s industrial heartland rely on elaborate, just-in-time supply chains that take advantage of lower costs in Hungary and Poland. French supermarkets are supplied with fresh produce that speeds from Portugal and Spain. And transnational commutes have become commonplace because Europeans can choose to, say, live in Belgium and work in France.
For many in the EU, passportfree travel is part of being European.
Permanent controls would destroy the business model of German industry, says Rainer Hundsdörfer, chief executive officer of EBM-Papst. It’s essential to move parts quickly from one factory to another (page 24). “That’s why the trucks go nonstop,” he says. “They come here, they unload, they load, and off they go.” Based in Mulfingen in central Germany, his company has factories in the Czech Republic, Hungary, and Slovakia. The parts Unczorg is carrying originated in Tapolca and Celldömölk, Hungary, and traveled more than 800 kilometers (500 miles) before being offloaded in Mulfingen for further manufacturing. Whether controls are here to stay depends on migrant flows. German Federal Minister of the Interior Thomas de Maizière said earlier in April that his country may end passport monitoring on the Austrian border by May 12 if the number of refugees trying to cross remains low. But Austria is considering new checks on the Brenner Pass route, a crucial highway link with northern Italy. Thousands of migrants are expected to cross the Mediterranean to Italy alone, especially from Libya, in coming months, Italian officials say. On April 13, European Union President Donald Tusk told the European Parliament in Strasbourg, France, that the EU would be “unable to prevent political catastrophes” if it failed to stem irregular migration or restore authority over migration policy. “Here I mean the collapse of Schengen, loss of control over our external borders with all its implications for our security, political chaos in the EU, a widespread feeling of insecurity, and ultimately the triumph of populism and extremism,” he said.
At the Austria-Germany checkpoint where Unczorg is stuck, a line of trucks stretches back some 6 kilometers, exhaust fumes mixing with the stench of manure spread on nearby fields. Under a big white canvas tent, four police officers search a large gray van. Two are armed with machine guns in addition to their service pistols, under orders issued following the terror attacks in Brussels. “You have no idea how many ways I’ve seen the smugglers hide people,” says Karsten Eberhardt, a German police commissioner. “If you carve out a hollow space under the seat and put a board in front, you can hide a pretty large person.”
Michala Marcussen, chief economist at Société Générale in Paris, says the political cost of Schengen’s collapse would be as dramatic as the economic fallout. “We’ve just been through the euro crisis and rebuilding institutions,” she says. “It’s better to fix Schengen, as it shows the
capacity to do things. That would give people confidence we could deal with shocks in the future.” John Follain, Carolynn Look, and Matthew Campbell, with Simon Kennedy and Jones Hayden
The bottom line Border-free movement, which has done more than any other initiative to unify Europe, is being constrained by the refugee crisis.