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

  • Canadian agriculture ministers briefed on trade-war contingency plan

    Economic CTV News
    VANCOUVER -- Federal Agriculture Minister Lawrence MacAulay emphasized the importance of the provinces working together as an escalating trade war with the United States puts some farmers on edge. The minister said his provincial and territorial counterparts discussed trade negotiations and the contingency plan during their conference that wrapped up Friday in Vancouver. Source
  • Teamsters members at CP Rail ratify new contract

    Economic CBC News
    Unionized conductors and locomotive engineers at Canadian Pacific Railway Ltd. have voted in favour of a new four-year collective agreement. Members of the Teamsters Canada Rail Conference (TCRC), which represents about 3,000 workers at CP, voted 64.7 per cent to ratify the new contract. Source
  • Pipeline protesters say they're willing to defy eviction notice

    Economic CTV News
    BURNABY, B.C. - Protesters at an anti-pipeline camp in Burnaby, B.C., say they are ready to defy an eviction notice handed out from the city. The City of Burnaby issued a 72-hour notice to those occupying "Camp Cloud" on Wednesday, but protesters say in a news release that isn't enough time to comply with concerns raised over safety. Source
  • Japan resumes Canadian wheat imports after suspension

    Economic CBC News
    Ottawa says Japan has ended its temporary suspension of Canadian wheat imports. Japan had halted shipments after some unauthorized genetically modified wheat was found in southern Alberta. Ottawa says the decision marks an end to all international trade actions arising from the discovery on June 14. Source
  • Ottawa says Japan has resumed Canadian wheat imports after temporary suspension

    Economic CTV News
    Ottawa says Japan has ended its temporary suspension of Canadian wheat imports. Japan had halted shipments after some unauthorized genetically modified wheat was found in southern Alberta. Ottawa says the decision marks an end to all international trade actions arising from the discovery on June 14. Source
  • 'This is madness': Auto industry warns U.S. lawmakers of dire tariff consequences

    Economic CBC News
    The world's automotive industry gathered in Washington with uncharacteristic unity, to deliver a singular message to American policymakers: If you start a trade war with tariffs on cars, you'll shoot yourself in the foot. The issue that has been gaining steam for weeks came to a head Thursday as dozens of representatives from the industry around the world deliver their remarks at a hearing before the U.S. Source
  • Loonie moves up as inflation ticks higher, TSX ends lower along with U.S. markets

    Economic CTV News
    Stock indexes in Canada and the U.S. closed down Friday on geopolitical tensions, while the loonie surged higher after Statistics Canada said the inflation rate jumped in June. Data from June showed the country's annual inflation rate rose to 2.5 per cent for the month, up from a 2.2 per cent reading in May to hit its highest mark in more than six years. Source
  • Loonie moves up as inflation ticks higher, TSX moves lower at late-morning

    Economic CTV News
    TORONTO - The loonie surged higher after Statistics Canada reported the annual inflation rate in June hit its highest mark in more than six years, while Canada's main stock index lost ground. The Canadian dollar was trading at 76.16 cents US, up from an average value of 75.44 cents US on Thursday. Source
  • Aimia shares surge after it announced Aeroplan program changes in 2020

    Economic CTV News
    MONTREAL -- Aeroplan's parent company received its biggest boost since announcing a change in CEO in April after its shares surged more than eight per cent Friday after it unveiled changes to the loyalty program once its exclusive partnership with Air Canada ends in 2020. Source
  • Boost to Canada Child Benefit comes into effect

    Economic CTV News
    If you are eligible for the Canada Child Benefit program, your monthly payment could soon be increasing. Effective Friday, the federal tax break is being indexed to inflation, which means an increase to keep up with the growing cost of living. Source