EU businesses, workers brace for return of border controls

SOPRON, Hungary -- The Hungarian city of Sopron, population 50,000, boasts an abundance of beauty shops and 200 dentists -- one for every 250 residents.

See Full Article

Most businesses don't target the locals, though; they're looking at the Austrians streaming across the nearby border to shop for bargains.

Such cross-border traffic could soon suffer, as the European Union considers re-introducing border controls for up to two years between some of the 26 nations in the Schengen passport-free area to deal with the migrant crisis.

If the border controls return, "we might as well close shop," says seamstress Eva Grubics. "Austrians make up 80 per cent of our business."

In Luxembourg, a thousand kilometres (600 miles) to the west, Schengen Mayor Ben Homan also has reason to hope the free-border agreement will remain in place. Its signing there in 1985 heralded a new era of passport-free travel, speedy transport and expanded commerce over much of a continent that had before been a patchwork of borders against hostile neighbours, competitive business and competing ideological blocs.

With locals' vineyards situated both in Germany and France just a few minutes' walk away, residents of his "little town of wine-makers" are more conscious than most of the agreement's advantages, says Homan.

Since the signing, thousands of businesses big and small have flourished on the guarantee of free travel. EU statistics show people making 1.3 billion crossings over the union's internal borders each year, while 57 million trucks transport goods worth hundreds of billions over those same boundaries annually. The free passage has also allowed some 1.7 million people to live in one country and commute to work in another.

Cities such as Malmo in southern Sweden and the Danish capital Copenhagen have in effect fused, reflecting how the EU has turned from a community of nations separated by borders to one of regions. But in the wake of the refugee crisis, the whole idea of open EU borders has been called into question.

Each country in the zone is allowed to unilaterally put up border controls for a maximum of six months. France did so after the Nov. 13 terror attack, and following the influx of more than 1 million migrants into Europe last year, Germany, Austria, Denmark, Sweden and Norway have done the same. Now, policymakers are poised to invoke an emergency provision that allows for an extension of such controls for up to two years, citing Greek problems in properly protecting the bloc's external borders from the flow of migrants fleeing war and poverty in the Middle East, Asia or Africa.

That could open the gates to broader border restrictions. EU Council President Donald Tusk has described the outcome of the debate as "decisive ... for the future of the EU" and EU Commission President Jean-Claude Juncker has warned of a collapse of the Schengen zone's domestic market.

Meanwhile, new checkpoints are already going up. Austria on Tuesday announced controls on its boundary to Italy's South Tyrol region in anticipation that refugees will use that as a new route as restrictions elsewhere increase.

Officials spoke of setting up "construction measures," bureaucratese for fences, at the new control points -- previously an unthinkable concept because of its connotation of separation.

Even if full disintegration of border-free travel among the 26 Schengen members does not seem imminent, some governments already are bracing for the possibility. Under such a scenario, a French government study sees an 8-per cent reduction in economic activity in the zone over the next decade amounting to 110 billion euros-- nearly $124 billion

Alexander Klacska, whose Austrian company runs more than 500 tanker trucks across Europe, cites a study based on three hours of waiting time for trucks a day on Austria's borders to and from its seven neighbours. He says the extra costs per day would total nearly 8.5 million euros (over $9.5 million) for truckers doing business in and out of the country.

A suspension of Schengen would mean "massive limitations for our company," he says. "We're very interconnected with Germany, with Slovakia, with Italy, all places where whole economic regions have grown together -- where borders have disappeared."

As he picks up his highway toll sticker for Hungary on the Austrian border, Dutch trucker Jack van der Veen recalls how he once waited for over two hours at the French port city of Calais for clearance to enter non-Schengen member Britain through the tunnel beneath the English channel. He describes the tough inspections there, where migrants try to sneak onto trucks bound for Britain, as the worst-case scenario that could potentially mean truckers are "stuck all day" waiting.

International transport could also suffer in other ways. German railway chief Ruediger Grube has warned that "if borders are closed, the railway will have to discontinue direct connections to foreign countries.

"The checks and delays that would then be incurred would not be sustainable," he told German tabloid Bild Zeitung.

Grube's Austrian counterpart, Christian Kern, is more optimistic.

"No one should be anticipating that Europe will again be divided into separate parts," he says. "This would result in such a destruction of prosperity that we should all keep a cool head and find (other) solutions."

Worries are more palpable among those who would be most hurt.

Grubics, the Hungarian seamstress, is set up in a shopping mall in Sopron built as border controls between Hungary and Austria ended as part of the Schengen regime. The mall is strategically placed just five minutes away from the Austrian border by car, and an hour's drive from Vienna.

Thousands of Austrians come for the day and leave with new dental work, manicures and hair-dos for less than half of what they would pay at home. Others come for a schnitzel at bargain prices, or stay longer for plastic surgery.

"Our Austrian customers are immensely important to our survival," says Grubics, looking up from the seam of a blouse that she is working on for an Austrian client.

Her face clouds when asked about a Schengen suspension and the worst-case situation of frequently blocked borders. "That would mean a lot of things would shut down here, and a lot of unemployment -- a huge setback for our town."

Across the border but just a few kilometres (miles) away, gas station attendant Timea Meszaros is also unhappy at the prospect. One of the nearly 70,000 Hungarians who work in Austria, she gets up at 3:30 a.m. and drives between 15 and 20 minutes from Sopron to make her early shift.

As controls were imposed at the height of the refugee crisis last summer, that trip took nearly two hours. She estimates that even at night, she would have to give herself an extra hour to arrive on time should checks, now on Austria's border with Slovenia, also be reintroduced on the Austrian-Hungarian border.

But with her income in Austria nearly double what she would make at home, she has few choices.

"I'd continue working here," Meszaros says.

Associated Press writer Raf Casert and AP video journalists Mark D. Carlson in Brussels and Philipp Jenne in Vienna contributed.



Advertisements

Latest Economic News

  • Ford investing $1.2B in 3 Michigan plants, adding 130 jobs

    Economic CTV News
    DETROIT -- Ford Motor Co. is investing US$1.2 billion in three Michigan facilities, including an engine plant where it plans to add 130 jobs. U.S. President Donald Trump applauded the move in an early morning tweet. Source
  • Purolator stops accepting new shipments as strike deadline nears

    Economic CTV News
    TORONTO - Purolator stopped accepting shipments today ahead of a strike deadline this afternoon issued by the union representing some of the courier's employees. Teamsters Canada issued the 72-hour strike notice Sunday after its members voted to reject Purolator's final offer. Source
  • Uber pulls out of Denmark citing tougher cab standards

    Economic CTV News
    COPENHAGEN -- The Danish branch of the ride-sharing service Uber said Tuesday it is shutting down its services in Denmark due to a proposed law that toughens standards for cabs. Uber's spokesman in Denmark, Kristian Agerbo, said Uber which has been in Denmark since 2014, "must take the consequence" of the proposal demanding cabs and cars for hire must have seat occupancy sensors and meters. Source
  • Costs of protectionism 'steep,' Bank of Canada governor Stephen Poloz says

    Economic CTV News
    OTTAWA -- Bank of Canada governor Stephen Poloz used a history lesson Tuesday to make a case for a policy mix frequently promoted by the federal government -- an openness to more foreign investment, immigration and free trade. Source
  • 'Openness and economic progress go hand in hand,' Poloz says in Oshawa speech

    Economic CBC News
    In a speech to university students on Tuesday, Bank of Canada governor Stephen Poloz argued that free trade, foreign investment and immigration all played critical roles in building Canada's economy throughout history. "When trade barriers are falling, when people are coming to our shores and when investment is rising, Canadians prosper. Source
  • New 12-sided British pound coin enters circulation

    Economic CTV News
    LONDON -- A new 12-sided British pound coin is entering circulation amid concern that the round pound was too easy to counterfeit. The new coin introduced Tuesday is intended to be the most secure in the world, featuring a hologram that changes from the pound symbol to the numeral one. Source
  • Trump takes credit as Ford set to announce spending on U.S. plants

    Economic CBC News
    U.S. President Donald Trump touted Ford Motor Co.'s expected announcement Tuesday about investments and jobs at its U.S. plants, saying the automaker would be making a major investment in three Michigan facilities. Big announcement by Ford today. Source
  • Waze gets into the order-ahead business with Dunkin' Donuts

    Economic CTV News
    SAN FRANCISCO -- Waze's traffic navigation app already shows ads prodding drivers to swing by fast-food joints like Dunkin' Donuts and Taco Bell. Now it's adding a new item to its menu -- the ability to place orders at some shops. Source
  • Home Capital fires CEO Martin Reid

    Economic CTV News
    TORONTO -- Home Capital Group Inc. (TSX: HCG) has terminated its president and CEO Martin K. Reid, effective immediately. The Toronto-based mortgage lender made the announcement after markets closed Monday. "Home Capital requires leadership that can bring to bear a renewed operational discipline, emphasis on risk management and controls, and focus on improving performance," Kevin P.D. Source
  • Oil ready to flow through Dakota Access pipeline under lake

    Economic CTV News
    The Dakota Access pipeline developer said it has placed oil in the pipeline under a Missouri River reservoir in North Dakota and that it's preparing to put the line into service. Dallas-based Energy Transfer Partners made the announcement Monday in a brief court filing with the U.S. Source