Germany’s Bertelsmann Foundation released a report today that says that the collapse of the Schengen area could cost the European Union economy up to 1.4 trillion euros over the next decade.
Employing a worse case scenario in which the reintroduction of controls at EU borders pushed import prices up three percent, the study assessed that the costs to Germany could be as much as 235 billion euros between 2016 and 2025, and those to France up to 244 billion.
Under a best case scenario, in which import prices rose one percent, the study showed that the cost to EU’s economy would be roughly 470 billion euros over the next decade.
While the collapse of the Schengen area would not only be a major setback for Greece, but the European integration project with unforeseen political consequences, it would increase the amount of time it takes for goods to be transported across European borders, raising costs for companies and consumers.
According to the study, moreover, countries outside the EU block would also feel the economic effect of the collapse of Schengen. The combined burden on the United States and China over the next decade is estimated at between 91 billion and 280 billion euros, according to the study.
(Source: Reuters)
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