Tougher Border Controls: The Potential Economic Consequences for Germany
Concerns Rise Over Potential Trade Barriers from Dobrindt's Plans Enhancing Border Controls in Germany
The proposals for stricter border controls by Germany's new Interior Minister, Alexander Dobrindt, have sparked concerns amongst the economy. According to the Handelsblatt, several associations shared this apprehension on Wednesday, fearing that the controls could pose restrictions on cross-border trade and for cross-border commuters. The Association of Foreign Trade advises that the controls be temporarily tightened only.
Volker Treier, the chief economist for foreign trade at the German Chamber of Industry and Commerce (DIHK), pointed out the potential negative impacts of stricter border controls. Even during the Covid-19 crisis, Treier explained that restricted border traffic has burdened the economy. Hence, politics should prioritize maintaining smooth cross-border trade and traffic in the pursuit of curbing irregular migration.
The strong international network of the German economy necessitates a functioning European internal market and the Schengen area, according to Treier. Moreover, intensified controls could lead to increased storage costs for companies due to delays and complications in just-in-time deliveries. This added burden could be particularly challenging during economically difficult times.
Treier also raised concerns about greater restrictions for cross-border commuters and service providers. Industries like local retail trade, bordering gastronomy, and the care and health sector are heavily reliant on free goods and people traffic, he said.
Potential Risks to Cross-border Trade and Economy
The extensive land borders shared by Germany and its neighbors total over 3,800 kilometers, making it a central hub in the European economy. Stricter checks could lead to increased costs for businesses due to delays, increased paperwork, and additional customs and compliance measures. This could reduce the competitiveness of smaller firms with inflexible logistics systems.
Daily cross-border commuting, particularly in regions near Poland and Austria, may face disruptions. The Polish ambassador to Berlin has noted that these border controls complicate daily border traffic, indicating increased wait times for workers crossing the border to their jobs.
Balancing Security and Economy
While Dobrindt's measures aim to project a tougher stance on immigration and border security, they have been seen by some as symbolic rather than comprehensive policy changes. Even symbolic shifts can create uncertainty among businesses and cross-border communities, potentially impacting investment and economic activity. However, Dobrindt assures that vulnerable asylum seekers (pregnant women, children) will not be turned away. Coordination with European neighbors is ongoing, which could help mitigate some disruptions in trade and commuting by harmonizing controls.
- The stricter border controls proposed by Germany's Interior Minister, Alexander Dobrindt, could have implications for employment policies within affected industries, as increased border traffic disruptions might affect cross-border commuters and service providers, including the local retail trade, bordering gastronomy, and the care and health sector.
- The financial implications of stricter border controls in Germany extend beyond just trade, as they could lead to increased costs for businesses due to delays, additional paperwork, and customs and compliance measures, potentially reducing the competitiveness of smaller firms with inflexible logistics systems.
