FT: France warns of EUR 100 bln EU border control hit

16:40, 03 February 2016
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France has warned that traffic jams and red tape caused by the reintroduction of border controls within the EU would reduce the bloc's annual gross domestic product by EUR 100 billion, according to the Financial Times.

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Many EU countries, under high terrorist alert and grappling with an unceasing flow of asylum-seekers from the Middle East and Africa, are considering ways to tighten security at their borders and some are demanding the re-imposition of controls on weak spots in the bloc's external frontier, especially Greece, FT reported.

The reintroduction of border controls among the 26 members of the Schengen passport-free travel zone would make the EU's economy shrink 0.8% compared to the 2025 estimates, according to the French government's economic planning agency. The impact would mostly stem from reduced tourist spending and trade.

Many countries have triggered an emergency clause in the Schengen treaty allowing them to perform border checks in case of a security emergency or a sudden influx of migrants.

Read alsoEU threatens to expel Greece from Schengen due to "leaking" bordersThose exceptional checks can be extended beyond six months if the European Commission approves. EU interior ministers last week discussed the possibility of starting such a procedure, pointing to Greece's inability to screen and process migrants landing on its shores.

Reinstating border checks will cost the French economy between EUR 1 billion and EUR 2 billion per year in the short term, the France Strategie economists estimated.

Read alsoJuncker: EU 'failed to deliver' on refugeesThe 122 million tourists who visit the country for a day would be less inclined to do so, meaning a loss of EUR 500 million to EUR 1 billion for the tourism industry per year. The number of French people working in Belgium, Germany, Spain, Luxembourg and Italy would shrink by 10,000 with the additional time and hassle of border controls — an economic loss estimated at EUR 300 million. Meanwhile, controls on trucks would cost the French economy between EUR 60 million and EUR 120 million a year.

"We need to find a more effective system to ensure security but we shouldn't permanently question the principle of free movement of persons," Mr. Pisani-Ferry said. "It's about persons but it has a big economic impact."

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