Study: Borders in Europe Would Cost Up to $3.3 Billion a Year

A study by the RAND Europe think tank shows that to restore borders across Europe would cost the continent more than $3 billion yearly, a number calculated using the cost of restoring physical borders, administrative costs, and losses from trade and travel. As Europe has drawn millions of refugees from Syria and other war-torn areas, some countries in the Schengen zone – the border-free area comprising 26 countries – have already begun applying border controls. Just months after Brexit, a referendum giving the go-ahead to the United Kingdom leaving the European Union, this study shows that the costs of limiting globalization’s reach may outweigh the benefits. The report also notes that when the Schengen zone expanded to central and eastern Europe, crime did not increase, as some analysts had expected. Similar worries about crime are used by those who favor strong borders. The Luxembourg prime minister suggested that a one-day closure would demonstrate the costs and chaos. – YaleGlobal

Study: Borders in Europe Would Cost Up to $3.3 Billion a Year

Europe would face enormous annual costs and trade damage by restoring border controls among 26 countries in Schengen zone, Rand study suggests
Valentina Pop
Wednesday, October 19, 2016

Restoring borders everywhere in Europe would cost up to €3 billion ($3.3 billion) a year, after one-off costs of up to €20 billion, according to a study published Thursday by the Rand Europe think tank.

The report, commissioned by the European Parliament, took into account the potential costs of restoring physical borders between countries that are part of the border-free Schengen area, the direct administrative costs stemming from managing those borders and indirect costs triggered by disruptions to trade and travel.

Under a first scenario –  a two-year border introduction in all Schengen states – the fixed costs could be in the range of €58.6 million-108.6 million. A second scenario envisaging the permanent abolition of the Schengen area estimates that the fixed costs could be in the range of €7.41 billion–19.76 billion.

Several EU countries still have border controls put in place in reaction to the migration crisis, making the first scenario likelier. Even as the number of migrants coming into Europe has significantly dropped compared to last year, security concerns are likely to lead to the extension of those controls for at least another six months. The European Commission, the bloc’s executive arm, next month will consider approving that extension until summer 2017.

Luxembourg Prime Minister Xavier Bettel earlier this week suggested closing inner Schengen borders everywhere for a day, to show people “what it is to be outside Europe.”

“It’s terrible what I’m saying, but it would be good for people to understand,” he added.

Mr. Bettel’s country was one of the five nations which set up the border-free area, named after the Luxembourg town of Schengen where the founding agreement was signed in 1985. The area has since expanded to cover most of Europe – 26 nations in and outside the EU.

The RAND Europe report notes that the 2007 enlargement of the Schengen area to Central and Eastern Europe did not lead to an increase in burglaries, car thefts and robberies. It also found “some evidence on positive associations between the abolition of internal border controls and the volume of seized drugs, such as cocaine and heroin.”

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