The European Union appears to be moving perilously close to ending its Schengen open-border area, a 30-year-old agreement that helped create the world's largest integrated economic block, as the refugee crisis continues to divide its members.
At a meeting Monday in Amsterdam, E.U. interior and migration ministers considered extending short-term border controls, which end in May, for an unprecedented two years to curb the flow of refugees into the bloc.
Already, five E.U. countries, including Sweden and Austria, have reintroduced some form of border controls.
Hardliners among Schengen member countries, led by Poland and many other former Soviet bloc E.U. members, are pushing to reintroduce controls to keep out refugees.
Under E.U. rules, governments can agree to suspend the Schengen system for up to two years.
But such a move, European interior ministers agree, could deal a potentially fatal blow to a system of unencumbered travel and commerce that has boosted the flow of goods and people, and business and financial services, since it was launched with just five countries in 1985. Schengen helped turn the 28-nation European Union into the world's largest homogenous trading bloc, responsible for 17 percent of global GDP.
Schengen has grown to include most E.U. countries but also non-E.U. members Norway, Liechtenstein, Iceland and Switzerland. E.U. countries that are not members of Schengen include Romania, Bulgaria, Croatia, Cyprus, Ireland and Britain.
Schengen is on the brink of collapse. Johanna Mikl-Leitner, Austrian Interior Minister
“A year ago, we all warned that if we don’t come up with a solution, then Schengen will come under pressure,” Klaas Dijkhoff, the interior minister of the Netherlands, said following more than eight hours of debate in the Dutch capital. Last year, his government floated the idea of a “mini-Schengen” to let Germany and its northern neighbors stem the influx of refugees.
Mr. Dijkohoff’s Austrian counterpart, Johanna Mikl-Leitner, was more blunt. “Schengen is on the brink of collapse,” she told reporters.
Chancellor Angela Merkel is under growing pressure to halt the flow of refugees after more than 1 million entered Germany last year. Ms. Merkel may be forced to accept some form of Schengen rollback at a meeting with E.U. leaders in February. She could also suffer a political setback in Germany, where three states are scheduled to hold elections on March 13 and key members of her own CDU party are pushing for a tougher stance.
At the meeting in Amsterdam, interior ministers from Germany, Austria and Sweden, which took in a combined 1.5 million refugees last year, were highly critical of Greece for not better restricting the flow of refugees into Europe.
Most of the refugees entering the continent have come through Greece from Turkey.
“We will exert pressure on Greece, which needs to do its homework,” Thomas de Maizière, the German interior minister, told reporters in Amsterdam.
Despite a €3.0 billion ($3.2 billion) promised E.U. aid package to Turkey to house Syrian refugees within its borders, more than 40,000 people have already arrived in Europe this year by sea from Turkey, beginning the Balkan route up southeastern Europe toward Germany.
Ms. Mikl-Leitner, the Austrian interior minister, rejected Greek arguments about the difficulties of patrolling its maritime borders with Turkey. “Greece has one of the biggest navies in Europe,” she said. “It’s a myth that the Greek-Turkish border cannot be protected.”
Some ministers demanded Greece set up vast holding camps, while others called on sealing the Greek border with Macedonia, effectively sealing off the country from the rest of Europe to tackle the migrant crisis.
“If a country doesn’t live up to its obligations, then we will have to restrict its connections to the Schengen area,” Anders Ygeman, the Swedish home affairs minister, said in Amsterdam.
Greek Migration Minister Yannis Mouzalas denounced the threat of his country being quarantined as a “blame game.”
Mr. de Maizière urged swift action, which didn't appear likely after the gathering.
“We need in the coming weeks a sustainable, tangible and clear reduction in the number of refugees coming to Europe and Germany,” he said. “If Schengen ends up in danger, then all Schengen member states are affected, economically and politically, and we don’t want that.”
Germany, Europe’s largest economy and transit hub, and one of the world's largest exporters, would be hurt hard if Schengen were suspended.
The costs of stricter border controls could “quickly total more than €10 billion in additional costs per year,” Martin Wansleben, president of the German Chambers of Commerce and Industry, said in an interview with Berlin daily newspaper Tagesspiegel.
Mr. Wansleben warned that waiting times at borders would create more bureaucracy and slow just-in-time deliveries, forcing companies to push more inventory from roads to expensive warehouses.
Alone, the costs of border controls between Austria and Germany will generate more than €100 million in costs, according to Stuart Colley, a spokesman for the International Transport Union.
In an interview with Tagesspiegel, he warned that many transport companies in the union, which are mostly small and medium-sized firms, could be driven out of business.
“Border controls hinder the free flow of goods and services and lead to inefficiency and the loss of jobs,” said Markus Beyer, president of Businesseurope, a lobby group in Brussels. “We need real European solutions and not a return to national egotism.”