The Impact of Border Controls on the German Economy Photo: CC0 Public Domain

The Impact of Border Controls on the German Economy

By  Friday, 11.3.2016, 18:47    News

Munich’s CESIfo Institute analysed and yesterday, March 10, 2016 published data on how border controls on the so called Balkan Route would influence the country’s economy.

Systematic controls of persons at the borders of the Balkan and Italian routes into the EU would reduce Germany’s economic output by an annual 1.36 to 3.36 billion euros. This would amount to 0.05 to 0.11 percent of annual economic output, or 17 to 41 euros per capita, according to calculations by the Ifo Institute featured in a study published in the latest issue of the ifo Schnelldienst on Thursday.

“These costs account for only a tiny fraction of the financial burden that would result if the mass inflow of migrants were to continue unchecked,” says Gabriel Felbermayr, Director of the Ifo Center for International Economics and one of the authors of the study. Exports of German goods would be 9.6 billion euros lower in this scenario, while imports would fall by 8.0 billion euros. “These figures are far lower than those calculated by Prognos and France Stratégie, because the latter are based on controls in the entire Schengen Area and assumptions of excessively high additional costs for transport companies,” added Felbermayr.

If systematic person controls are assumed at all European borders of the Schengen Area, Germany’s annual economic output would fall by between 4.37 billion to 10.79 billion euros, which is between 0.14 percent and 0.36 percent of the total figure. “This amounts to between 54 and 132 euros per capita”, explained Felbermayr. If controls on persons were only to be carried out at Germany’s borders with Austria, annual real gross domestic product would be between 770 million und 1,9 billion euros, or 9 to 23 euros per capita lower.

The effects on overseas trade are not taken into account in these figures. The figures also do not reflect the fact that controls would only be performed on entry to the country, and not on departure from it; and that a considerable share of trade flows do not take place via road. “These calculations should therefore be seen as upper limits,” said Felbermayr.

Controls on persons have roughly the same effect as a customs duty of 0.5 percent. Experiences at the USA’s borders to Canada and Mexico show that trucks have to wait around 20 minutes on average at border controls.

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Vilijam Zufic

Translator (German, Croatian, English), guide and unacknowledged blogging genius. Born and lives in Pula, Istria, Croatia. Educated in Germany, Croatia and the United States, economics graduate. Currently beginning to prepare to train for pulling himself up by his bootstraps. Married with children. Father of Croatia’s greatest football talent. Knows all there is to know about Istria, camping and bratwurst. At the verge of something big with the only German language blog on Istria No sense of humour. Here to meet like-minded people.

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