October 25, 2016

EU executive eyes fixing open border Schengen zone by year-end

A migrant warms herself by the fire in a makeshift camp at the Greek-Macedonian border,near the Greek village of Idomeni

The European Commission outlined a plan on Friday to restore the fraying 26-nation Schengen open border area by year-end, warning it would cost the European economy up to 18 billion euros ($19.7 bln) a year if passport-free travel collapses.

Ahead of an emergency European Union summit with Turkey next Monday to discuss how to halt an influx of migrants that has driven several EU and Western Balkan states to re-impose border controls, the EU executive proposed no new measures but set out a timetable to rescue the Schengen zone by December 2016.

The EU is scrambling to implement a strategy to curb the inflow before warmer weather encourages more arrivals across the Mediterranean of people fleeing wars and poverty in the Middle East and Africa.

More than 135,000 arrived in Europe – mostly through Greece – so far this year after more than a million people entered the bloc in 2015, trekking chaotically towards wealthier EU states, mainly Germany and Sweden.

Seven Schengen countries including Germany have emergency border controls in place now and the Commission said it wanted them all lifted no later than December with an eye on fully restoring the partly-suspended area by the end of the year.

Open internal borders are widely seen as a major achievement of European integration that facilitated travel, tourism, trade and supply chains across the bloc, fuelling economic growth.

In its report, the Commission estimated the direct cost of a full restoration of border controls inside the Schengen zone at 5 to 18 billion euros a year, with additional administrative and second-wave costs on top of that.

First hit would be the transport and tourism sectors, as well as the people who commute to work daily across borders.

However, JPMorgan Chase said in a note to clients the direct impact of an imposition of selective border controls, more likely than a complete lockdown, would be “small in business cycle terms.”

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