Europe economy faces big hit if Schengen collapses

Europe’s leaders are heading to Brussels for a summit aimed at finding common purpose on how to handle the refugee crisis. With tens of thousands still fleeing war in Syria, there are growing fears Europe’s Schengen free movement zone, made up of 26 countries, may be at a critical juncture.

Businesses at this Berlin trade fair are worried. Two decades of open borders have served Germany’s export driven economy better than most in the Schengen zone. But with this pillar of integration under threat – it’s not just the flow of people that would slow.

By some estimates, the end of Schengen could cost its former members more than 100 billion Euros a year.

Schengen’s internal borders remain open – but restrictions introduced by several European countries may already be having an impact on businesses like these. The EU’s ‘Plan A’ is to persuade Turkey to take in more refugees. But with progress slow, there’s now serious discussion about excluding Greece – and moving the external border north into central Europe.

Even there: doubts as to whether that will be enough. Austria, this week, confirmed it would enforce a daily limit at its border.

Though some believe, regardless, a core group would remain.

Germany particularly is still pushing for a breakthrough. Without one, its political – and economic losses – are likely to be great.