Ramped-Up Border Controls: A Cautionary Tale for German Economy
Concerns Arise over Potential Trade Restrictions due to Dobrindt's Plans for Stricter Border Controls in Germany
In a twist of events, the new Federal Minister of the Interior, Alexander Dobrindt, is proposing stricter border controls. Economy associations, however, are sounding the alarm, fearing potential trade barriers from these plans. According to "Handelsblatt," several associations voiced their concerns about the impact on cross-border trade and commuters on Wednesday.
The Association of Foreign Trade suggested a temporary clampdown on border controls. Volker Treier, the chief economist of the Association of German Chambers of Industry and Commerce (DIHK), stressed that even the Corona crisis had showcased how restricted border traffic could negatively impact the economy. He urged politics to maintain the flow of important supplies and cross-border trade, emphasizing the necessity of a functioning European internal market and the Schengen area for Germany's internationally networked economy.
Treier also brought attention to the financial implications of stricter controls. He predicted that these measures could result in higher storage costs for businesses due to delays in 'just-in-time' deliveries. Moreover, he cautioned about greater restrictions for cross-border commuters and service providers, particularly local retail trade, border gastronomy, and the care and health sector, which heavily rely on free goods and people traffic.
Considering the potential economic impacts, stricter border controls might lead to increased administrative costs, increased trade slowdown, and challenges for local economies near borders. Furthermore, commuters might face disruptions, impacting productivity and workforce availability, while restrictions on the movement of workers could exacerbate labor shortages in certain sectors. Lastly, commuting costs for workers could increase, affecting their disposable income and potentially leading to increased costs of living.
While stricter border controls aim to reduce illegal migration, they could have unintended consequences by affecting trade efficiency, commuting, and labor market dynamics. These measures could conflict with European Union legislation, leading to diplomatic tensions and potential legal challenges. Furthermore, stricter border controls might affect tourism, impacting the tourism sector, a significant contributor to the German economy.
In essence, while addressing irregular migration, it's crucial to consider the potential economic ramifications on cross-border trade and commuting. A delicate balance must be struck to maintain the smooth functioning of the economy while ensuring border security.
- The Association of Foreign Trade suggested a temporary halt on stricter border controls, as raised by the new Federal Minister of the Interior, Alexander Dobrindt, fearing potential trade barriers.
- Volker Treier, the chief economist of the Association of German Chambers of Industry and Commerce (DIHK), warned that even the Corona crisis had demonstrated the negative impact of restricted border traffic on the economy.
- Treier highlighted the financial implications of stricter border controls, predicting that higher storage costs for businesses could result from delays in 'just-in-time' deliveries.
- He also pointed out greater restrictions for cross-border commuters and service providers, especially local retail trade, border gastronomy, and the care and health sector, that heavily rely on free goods and people traffic.
- Considering the potential economic impacts, stricter border controls might lead to increased administrative costs, trade slowdown, challenges for local economies near borders, disrupted commuting, labor shortages, increased commuting costs, and potential impacts on the tourism sector.
