The end of the Schengen area heavily penalize the European economy – Les Echos

The issue is highly political but the response will also have an economic cost. In a study published Wednesday, France Strategy, a think tank attached to Matignon, estimated the economic impact of the end of the Schengen agreements to 13 billion euros to the Hexagon in 2025, 0.5 percentage point of GDP. And for the countries of the Schengen area as a whole, the impact would be even greater. It is approximately 0.8 percentage point of GDP, or more than 100 billion euros in ten years horizon.

These agreements have created in 1995 a space where people can move freely, have lead in the wing. With the influx of migrants, several European states want to end it at least temporarily. But the cost of a return of national border controls would have a high cost. In the short term, tourists from neighboring countries could void their very short stays: tourism flows could decline by 5% in the case of people from any night in the country visited, while the tourists are spending two nights would reduced by 2.5%.

penalized Frontier workers

The 350,000 French border workers lose time – which would result in a loss win in terms of GDP – and some of them would be discouraged. For information, between Denmark and Sweden, the Oresund Bridge between Copenhagen and Malmö, frontier workers are putting additional 45 minutes to perform their usual route since the re-introduction of identity checks. The economy of border regions would be badly affected if widespread shutdown of free movement. Finally, road traffic would also be affected. At a time when production lines are broken in different countries, the lengthening of delivery times would affect the flow of trade.

Workaround

Thus, according to the study, “ direct cost to France would be one to two billion euros according to the intensity of border controls, excluding the cost of these controls “. Jean Pisani-Ferry, President of France Strategy, “Short-term, the cost seems bearable as it is an emergency measure. There is indeed a security imperative dysfunctions seen in the visa system. The real risk is not there. The risk is to eventually leave the Schengen area fragment instead of imagine and implement an alternative solution ” , he said.

Commercial Effect “not insignificant” in France

In the long term, exports from France to other members of the Schengen area as part of the European Union could decline 11.4%. “This is a significant order of magnitude compared with other trade agreements” , says Sébastien Jean, president of the Centre for Future Studies and International Information (CEPII). “The end of the Schengen area is a priori a grain of sand but as it would apply on huge trading volumes, its effect would be far from negligible” . Indeed, France generates around half of its foreign trade with members of the Schengen area. The study of Strategy France, the widespread permanent controls would be equivalent to a 3% tax on trade between countries in the Schengen area, which structurally decrease from 10% to 20%.

But it is not sure that this is the main disadvantage of abandoning the Schengen area. “Basically, the cost is also symbolic because any setbacks affect the representation that citizens have of the European Union , considers Jean Sebastien. This is a visible aspect of European construction daily to millions of citizens “. No doubt that the European dynamic to be seriously shaken.

William Calignon