Impact of German Border Controls on Economy and Trade

Stricter border controls at Germany’s borders are having significant negative impacts on the economy. Experts predict delays in inner-European traffic, leading to costlier goods, disrupted supply chains, and losses for German companies.

Allianz Trade estimates an average increase of 20 minutes in travel time on cross-border routes, causing a 1.7% rise in import costs and potentially reducing imports by around 8%. This drop could amount to an annual loss of up to 1.1 billion euros, affecting production and increasing storage costs.

The measures, implemented in early September to combat irregular migration, have drawn criticism from several European nations. The restrictions also impact personal travel, harming tourism and the mobility of border commuters.

These controls will likely reduce overall trade volume and weaken the competitiveness of German manufacturers, which is already at a low level. The consequences extend across various sectors, including machinery, chemicals, and pharmaceuticals, with significant import losses.

Despite assurances from German authorities to protect commuter traffic, neighboring countries like Luxembourg are urging for more balanced measures to minimize disruptions.