A collapse of Europe’s Schengen passport-free travel zone could cost the European Union up to 1.4 trillion euros over the next decade, according to a study by Germany’s Bertelsmann Foundation.
The study concluded that under a worst case scenario, in which the reintroduction of controls at EU borders pushed import prices up three percent, the costs to the bloc’s largest economy Germany could be as much as 235 billion euros between 2016 and 2025, and those to France up to 244 billion.
With import prices rising at least one percent, the study calculated that a breakdown of Schengen would cost the EU roughly 470 billion euros over the next decade.
Cost escalation
The cost would escalate to 1.4 trillion euros, or roughly 10 percent of annual gross domestic product (GDP) in the 28-member EU bloc, under the more dire scenario.
“If border controls are reinstated within Europe, already weak growth will come under additional pressure,” said Aart De Geus, president of Bertelsmann.
Schengen was established over 30 years ago and now counts 26 members, 22 of which are EU members; nevertheless, the system of passport-free travel has come under severe pressure over the past half year due to a flood of migrants entering Europe, mainly from the Middle East and Africa.
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