Land border controls could impact German economy, business groups say

Germany’s business groups are raising the alarm over fears that the country’s newly reintroduced land border controls could impact the economy.

The country’s Chamber of Commerce and Industry says companies are experiencing delays, which is especially problematic for time-sensitive goods such as food.

However, it’s not just the movement of products that is of concern, but of people.

The Chamber of Commerce in Frankfurt Oder, a border town near Poland, is advocating that workers coming into Germany pass through the checks more quickly with special government certificates.

“We have seen and experienced with the enterprises in our region that they are now having problems commuting,” said Daniel Felscher, a consultant at the Chamber of Commerce and Industry Ostbrandenburg.

“Also regarding the traffic of goods between the borders and especially with the workforce that Germany relies on in specific economic areas, we have to have those commuters, and we cannot lose them because we need them.”

Frank Huster, the managing director of the Federal Association for Freight Forwarding and Logistics (DSLV), told Euronews that his organisation was especially concerned about whether other European countries would bring back border checks.

Huster urged Germany to implement the green lanes policy that was in place during the pandemic, which allowed freight vehicles to pass through border crossings quickly.

“Road checks when entering Germany could also delay many trucks crossing the border. This also affects cross-border commuters who work in German logistics facilities. Restrictions on the free movement of persons can therefore also mean delays and cost increases for the economy,” Huster said.

“A return to barriers in Europe would be disastrous for the free movement of goods and the internal market.”

Extra checks to increase recession risk?

The extra border checks were put in place last month after the so-called Islamic State group claimed responsibility for an attack at a festival where three people were stabbed to death.

The interior ministry says the checks are meant to decrease irregular migration and stop criminals.

“We want to reduce irregular migration further, stop migrant smugglers and criminals, and detect Islamists before they can do any harm,” said Nancy Faeser.

“We continue to work closely with our neighbouring countries. We want to make sure that border control measures affect cross-border commuters and people living in the border regions, as well as businesses and commerce, as little as possible.”

The credit insurer Allianz Trade said it expected delays could decrease trade and increase the risk of a recession.

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“The additional waiting times at the borders are also likely to increase transport and goods costs for imports by around 1.7% (services: 1.5%) and thus reduce both the overall trade volume and competitiveness, which is already at a low level for German manufacturers,” Allianz Trade stated in an email to Euronews.

“The temporary border controls could furthermore trigger a chain reaction: trade could lose up to €1.1 billion per year in the worst case. As a result, recession risks could increase further and possibly lead to economic losses in gross domestic product (GDP) of up to around €11.5 billion.”

An association representing Germany’s transport and logistics industry has also warned the checks could end up increasing costs for companies, leading to higher prices for consumers.

“There could be traffic jams or there could be delays, which will increase the cost for our truck companies, and they will have problems with driving and rest time, and they have to get higher prices for the transport solution, and this is a big problem,” said Dirk Engelhardt, the CEO of the Federal Association of Road Haulage, Logistics, and Disposal (BGL).

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The group says if such delays happen, it will lobby the European Commission to set up special lanes so that most trucks can bypass the controls and to focus on tougher external border checks.