Border-Closing Costs to EU Economy Tallied as Merkel Stands Firm

  • Cost to EU's output could be EU1.4 trillion over a decade
  • Two state leaders break ranks with Merkel on refugees

Ending passport-free travel could cost the European Union’s economy as much as 1.4 trillion euros ($1.55 trillion) over the next decade, according to a new study, lending support to German Chancellor Angela Merkel’s argument against closing borders to ward off refugees.

Pressure to change her stance is increasing within Merkel’s party as her Christian Democratic Union’s poll lead shrinks ahead of elections in three German states on March 13. The lead candidates in the two biggest regions publicly challenged the chancellor over the weekend with an appeal to limit migration at Germany’s borders. Merkel will hold a campaign rally in Landau near the French border later Monday.

Permanently restoring identity checks within the EU would mean longer waits at border crossings for commercial traffic, leading to increased production costs and higher prices, according to the Prognos study commissioned by the Bertelsmann Foundation. That could translate into a 1.4 trillion-euro loss to the EU economy through 2025 as consumer prices increase and demand drops, according to the study.

“If Europe’s internal barriers go back up, it will put even more pressure on growth, which is already weak,” Aart De Geus, the foundation’s head, said in a e-mailed statement. “Ultimately, it is the people who will pay.”

After more than 1 million asylum seekers came to Germany last year and last week’s EU summit failed to address the refugee crisis, Merkel is finding the economic argument hard to sell.

CDU candidates Julia Kloeckner, who is running for premier in the state of Rhineland-Palatinate, and Guido Wolf, who’s seeking to win back the province of Baden-Wuerttemberg for Merkel’s party, issued a statement criticizing EU countries for failing to work with Germany on a bloc-wide solution to its worst refugee crisis since World War II.

Austrian Solution

Germany should take its cue from Austria and impose daily quotas for asylum seekers and set up refugee holding centers at the border, the two candidates said. Merkel has rejected both measures.

Volker Kauder, the head of Merkel’s Christian Democrat-led parliamentary bloc, pushed back, urging the party to rally around the chancellor “to show that we’re standing together and have a path toward solving the problem.”

“New proposals every day won’t put us on the right track,” he said in an interview on ARD public television.

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