JEL Classification F22
1. The Schengen Area: 31 years of Success
The Schengen Agreement is undoubtedly a remarkable form of cooperation between European states and a critical component of the Single Market. The agreement was signed in Luxembourg in 1985, in the town of Schengen, by the heads of states and governments of five European countries: Belgium, France, Luxembourg, Germany and Netherlands. They agreed on gradual reduction of their border checks with the long-term objective of fully abolishing them. Currently, citizens of 26 countries can cross the borders to live, work or travel in the Schengen area, without border checks. Having on them a valid identity card to prove their identity is enough for over 400 million European citizens to travel at any time and in any place in the Schengen area, just as they would travel in their own country. The old Europe, made of many fortified cities and countries with rigid borders, is now history. 26 countries have put together all the resources, willing to share a common future. According to a study coordinated by the European Commission, in the first quarter of 2015, the free movement of persons, goods and services was considered by the member countries as the greatest achievement of the EU. (Eurobarometer, 2015).
A Europe without internal borders brings significant economic benefits to member countries, increases international cooperation, facilitates movement of labour and speeds up commercial relationships. A big advantage lies with cross border commuters, who are working in an EU country, but live in another and return home daily, or at least once a week. In the absence of customs controls, they save time and have more employment opportunities. In the country of destination they can find income advantages or better job profiles. The number of frontier workers, as they are also called, revolves around 1.7 millions (European Commission, 4 March 2016) and can be found mainly in the developed European countries, like France, Germany, Belgium etc. Labor mobility is an unquestionable advantage for companies. The labor shortage in certain branches can be overcome by employing workers from neighboring countries. Having a wider possibility to choose, employers can select the most suitable employees. Free movement also encourages online trading firms, which have seen a huge expansion in recent years. Transport of goods and services is much faster and cheaper, which in turn benefits the final consumer. Increased competitiveness of goods and services contributed to the EU ranking as the major world trading power in 2014.
For citizens to feel safe in the Schengen area, it is imperative for the external border security to be strengthened. In this respect, all controls are carried out according to a set of common rules regarding visa, migration and asylum. With a single entry visa, a foreigner can visit any of the 26 states, which will encourage tourism in member countries. Regarding asylum policy, the Schengen countries relate to the provisions of the Dublin Regulation, according to which, the country where the asylum seeker enters is responsible to identify him and to record his request. In order to ensure protection of the citizens from the Schengen area, to fight against terrorism, organized crime, human trafficking and illegal migration, the local and the border police of each country is in a close collaboration. The Schengen Information System (SIS) ensures mutual operational assistance and direct exchange of information between police forces, surveillance and cross border tracking of law breakers (European Commission, 16 December 2016). If the ideal of free movement has been reached, not the same can be said about the efficiency of the programs meant to protect the external borders. In this regard, member states invest resources and time to find the best solutions to meet the international challenges.
Even though the Schengen Agreement has been incorporated into the body of rules governing the EU, the Schengen area is not the same as the European Union. Non-EU states Norway, Liechtenstein, Iceland and Switzerland are members, but recent accession countries: Romania, Bulgaria, Cyprus and Croatia are not yet part of the agreement. Free movement has a special significance for the citizens of Eastern Europe, who lived under communism and who were forbidden to travel west. Being members of the EU, the citizens of these countries are subject, at the entrance into the Schengen area, to a minimum identity verification based on travel documents (passport or identity card). However these countries have not yet received the vote of confidence from all members, in order to be part of the agreement and enjoy its benefits. To join the Schengen area, states must demonstrate that they are able to secure external border control and to cooperate effectively with other Member States in order to maintain a high level of internal security. Because of the present migration crisis it is hard to believe that the Schengen area will expand in the near future.
Still, there are countries that have chosen not to implement the Schengen agreement in their territory. These are the United Kingdom of Great Britain and the Republic of Ireland. The two countries want to have the power to control their own borders, being concerned of the internal security. However, the United Kingdom operates the Schengen Information System within the context of law enforcement cooperation and Ireland takes the necessary steps to achieve this goal (European Commission, 16 December 2016).
Despite the reluctance to depend on another state in borders security issue, Ireland and the UK (including the Channel Islands and the Isle of Man) are now a common travel area. They have signed an agreement called Common Travel Area (CTA), which is an area of free movement of British and Irish citizens, meant to facilitate tourism and trade relations between the two countries. These measures have proved extremely beneficial especially because of the tight economic relations between the two countries. In 2015 Ireland's largest imports came from the UK while the second largest export partner of the country was also UK (UN Comtrade Database, 2015). As in the case of the Schengen agreement, CTA involves meaningful cooperation actions in terms of visa, migration etc. For the bureaucracy and the spending not to discourage tourists interested in visiting the two countries, their government has started a program called British-Irish Visa Scheme. Through it, the Indian and Chinese citizens will be able to travel to and around the Common Travel Area (CTA) with one short stay visa which will have 'BIVS' endorsed on it. (GOV.UK, 10 December 2015) Currently the program is limited to these two nationalities, with the possibility of expansion in the future. To encourage tourism from the developing countries, the Irish government launched The Irish Short Stay Visa Waiver Programme, which allows certain visas issued by the UK to be recognized for tourism in Ireland. Thus, citizens of 18 countries from Eastern Europe and Central Asia, who have a Short Stay visa category "C" in the UK can travel in Ireland until the expiry date, without a further additional visa (Irish Naturalisation & Immigration Service, October 2014).
Accession to the Schengen Area, or a visa cooperation with the member states would surely increase the number of tourists visiting the UK and Ireland but the chances are small, especially in the context of the wave of migrants who invaded Europe since last year.
2. Migration Crisis in Europe
Europe is struggling with the biggest migrant crisis from the Second World War to the present. In 2015 more than 1 million migrants have requested protection in Europe, and their number is growing every day. In the category of migrants are included the refugees of war which came from Syria, Afghanistan and Iraq but also economic migrants in search of a better life, coming from North Africa and the Balkans. Over 140 countries, including the European Union members, signed the 1951 Refugee Convention and its 1967 Protocol, documents that define the status of refugees. The refugee is a person who is outside his or her country of nationality or habitual residence; has a well-founded fear of being persecuted because of his or her race, religion, nationality, membership of a particular social group or political opinion; and is unable or unwilling to avail him— or herself of the protection of that country, or to return there, for fear of persecution (UNHCR, September 2011). Based on the principle of non-refoulement, countries are not allowed to deport a refugee in territories where his/her life or freedom would be threatened. When the fundamental rights of citizens are violated and when the countries of origin no longer provide protection, the international community must intervene. Thus, refugees from Iraq - where the population is terrorized by ISIS, Afghanistan - devastated by war and Syria - where the population is afraid of ISIS and civil war, have sought help in Europe.
Besides these, many poor citizens of Albania, Bosnia-Herzegovina, Macedonia, Kosovo, Montenegro, Serbia and Turkey, seeked asylum in the European Union but few requests received a positive response. According to international regulations and the laws of the EU, these countries are considered safe, meaning they are characterized by a democratic system, no armed conflicts, minority rights are protected and the human rights are respected (European Commission, 2015). In the category of economic migrants are also included the citizens who came from Pakistan, Bangladesh, Nigeria, Somalia in search of a better life. The EU countries have sought to carry out a careful selection on those who truly need protection and those who have no real reason to get asylum.
According to the information provided by the UN Refugee Agency (UNHCR), in 2015 over 1 million migrants came to Europe by sea, almost 5 times more than the previous year. Most of them, 80% arrived in Greece, 15% in Italy and the rest in Spain and Malta (UNHCR, 2015). The Dublin Regulation, signed by EU countries, stipulates that refugees will ask for help in the first member country they reach. The police in Greece, Italy, Spain and Malta had the duty to register every migrant, take their fingerprints and check them in the national and international database, in order to prevent the wave of criminals. Following this procedure, the authorities would decide for each asylum seeker if he will get the refugee status or if he will have to return to the country of origin. Because of lack of personnel, adequate technology and registration centers, the authorities in Greece and Italy were overwhelmed by the large number of migrants. Although these were the countries where they had to seek asylum, they became only transit countries. The final destination of the migrants became the developed countries in the north-west of Europe, were they hoped to find jobs or to benefit from the social aid programs.
Germany has encouraged this trend, calling migrants through the generous "Willskommens Politik" of Chancellor Angela Merkel. Thus, it accepted around 800,000 refugees in 2015, sparking a wave of migration in Europe which could not be controlled. German Chancellor reasoned her decision on humanitarian grounds and tried to convince her European counterparts to follow her lead. A large number of migrants, who did not have a Schengen visa, crossed Hungary and Austria illegally to arrive in southern Germany. Once they got there, they were not sent for registration in the country where they entered the EU, and so the Dublin Regulation started to lose its legitimacy. There is a huge risk that with the wave of migrants, terrorists will infiltrate in the Schangen area. Two of the jihadists who attacked France in November 2015 infiltrated through the refugees who came from Greece.
3. The European Union’s Reactions
Freedom of movement represents the benefit of joining the Schengen area, without it being regarded as absolute. Schengen rules allow national authorities to reintroduce in exceptional cases and temporary, internal border controls in case of serious threats to security or serious deficiencies at external borders that represent a risk to the overall functioning of the Schengen area (European Commission, 2015). Schengen members have introduced internal border controls in the past but for a short period of time, less than 30 days, during the meetings of heads of State and government, the European football championships, the Nobel awards ceremony, etc. A first warning shot about the vulnerability of the Schengen system was fired in April 2011. France has reintroduced border controls with Italy after about 48,000 migrants arrived from Tunisia in the Italian island of Lampedusa, due to political turmoil. Even though the situation was dealt with quickly and most migrants returned home, a sense of concern has rippled throughout the Schengen area.
Starting September 2015, in the face of the threats generated by the great influx of people coming from North Africa and the Balkans, many countries have introduced internal border control. After accepting a record number of more than 800,000 applications for asylum in 2015, at the end of the same year, Germany was forced to reinstate border controls with Austria. Overwhelmed by the number and the speed at which the migrants came, German Chancellor Angela Merkel called on other European countries to register them and analyze their asylum claims. Austria, Sweden, France, Denmark, Norway and Belgium have chosen to strengthen their own security at frontieres too (European Commission, 2015). In this regard, Sweden refuses to accept the migrants who do not have identity documents with photo and Denmark and Switzerland confiscate belongings of the asylum seekers to contribute to their upkeep. To reduce extra transit, Austria and Hungary erected a protective fence on the border with Slovenia - Schengen member country. Thus, metal barriers, wire fences and scrupulous border controls are the solutions found by some Schengen members in front of the largest influx of refugees from the Second World War to the present.
If the functioning of the Schengen area is in danger due to control deficiencies at external borders and if there is a serious threat to public order and internal security of a state, border control can be extended to a maximum of 2 years (Official Journal of the European Union, 6 November 2013). The posibility of Schengen suspension for 2 years circulated a lot lately, however the EU is constantly seeking solutions designed to restore the proper functioning of the system.
Since the beginning of 2015 more than 1,000,000 refugees have come into Greece from Turkey mainly in the islands of Kos, Leros, Chios, Lesvos and Samos. Considered the weak link in terms of external border security, Greece is under huge pressure from the Schengen members to reinforce control. Although many EU diplomats suggest removing Greece from the Schengen area, the EU Council Presidency, represented by the Luxembourg Minister of Immigration, Jean Asselborn, rejected the hypothesis, stating that "it is not legally possible to exclude the member countries from the Schengen area" (European Commission, 04 december 2015). The solution proposed by the European Commission is supporting Greece and Italy to effectively record all the refugees and ensure safe return to the ones whose request for asylum were not approved. The two countries have received financial support and technical assistance from the EU institutions and member states agencies to effectively enforce Dublin Regulation. Given the impact of the unprecedented refugee crisis on Greece, The UN Refugee Agency and the European Commission have launched a program to provide 20,000 additional reception places for asylum seekers in Greece offering them access to €80 million from the 2016 budget. Hotel vouchers, rental apartment programmes and subsidies to families who will host refugees will be supported by the European Commission. According to the progress report on February 2016, none of the two countries met the commitments taken in October 2015 regarding the number of registration centers established. However progress is made, as the proportion of migrants whose fingerprints are included in the Eurodac database has risen in Greece in September 2015 from 8% to 78% in January 2016 and in Italy from 36% to 87% over the same period (European Commission, 10.02.2016). The goal is to achieve a percentage of 100% because the safety of citizens is at stake in the Schengen area.
Greece and Italy will be supported by EU agencies: The European Asylum Support Office (EASO), EU Border Agency (Frontex, 2016), EU Police Cooperation Agency (Europol), and EU Judicial Cooperation Agency (Eurojust) to identify, register and fingerprint incoming migrants. To protect borders but also to prevent accidents in the Mediterranean Sea, which in 2015 ended with 3,771 missing persons (UNHCR, 2015), EU has intensified its two maritime operations coordinated by Frontex: Triton and Poseidon. Operation Triton acting in the central of the Mediterranean Sea to Malta and Poseidon acting in the eastern Mediterranean Sea, will benefit in 2016 from an additional amount of €45 million. In future, the European Commission proposes setting up a new agency called the European Border and Coast Guard, which will absorb Frontex and will have more authority and resources. The agency will be engaged in terrorism prevention, a very sensitive subject lately, but also in sending in the country of origin the asylum seekers who will not be received in the European Union (European Commission, 15.12.2015).
For security reasons too, the EU wants the persons enjoying the right of free movement under Union law to be checked in the future at the entry and exit into/of the Schengen area, in all databases. Moreover, in the context of terrorist attacks in 2015, the European Commission proposes verifying the third country nationals when exiting the Schengen area, not just at the entrance (European Commission, 15.12.2015).
Despite the increasing security at external borders, the wave of migrants failed to be stopped. Brussels officials have realized that solving Schengen area’s problems will not stop the tide of migrants in Europe. To prevent the death and disappearing of more migrants in their long and dangerous road to Europe, the EU seeks to discourage migrations and negotiate for migrants to be received in the neighbouring countries where there are no conflicts. In order to bring a quick decrease in the number of arrivals in Greece, EU signed a joint action plan with Turkey in October 2015, as part of a comprehensive agenda of cooperation based on joint responsibility and mutual commitments. Due to its geographical position, Turkey currently hosts over 2.5 million immigrants, making great efforts in ensuring their support and humanitarian aid. To support Turkey in coping with the challenge represented by the presence of Syrians under temporary protection, the EU approved the allocation of €3 billion for food, health services and education (European Council, 03.02.2016). Turkey will also receive financial and technical support to prevent illegal migration and manage more efficiently the process of returning migrants. However, the funds EU promised were not sent to the Turkish government until March 10, 2016, and the migrants’ influx in Greece has not diminished. In 2015 more than 2,000 people have arrived in Greece every day, regardless of weather, and the perspectives are even more worrying.
In the face of this unprecedented situation, the EU and Turkey elaborated on March 7, 2016 a new plan designed to ease the migrant crisis. Turkey will agree to take back all migrants not in need of international protection crossing into Greece from Turkey and all irregular migrants apprehended in Turkish waters. For every Syrian readmitted by Turkey from Greek islands, EU will resettle another Syrian from Turkey to the EU Member States, within the framework of the existing commitments. To achieve this goal, the EU is determined to make available as soon as possible the first instalment of the €3 billion promised to the Turkish government and bear all the costs associated with this new project. The final details of this agreement will be established in the coming weeks, but both sides are very optimistic about the chances of this plan to succeed. Because Turkey has become a key partner in solving the refugee crisis, the EU seeks to reward it. It is accelerating the implementation of the roadmap on visa liberalization, with a goal of lifting the visa requirements for Turkish citizens at the latest by the end of June 2016 and is also speeding up the process of Turkey's accession in UE (European Council, 08.03.2016).
Regarding the African migrants who come in Europe wishing to obtain a better life, the EU invests in the countries of origin to alleviate poverty and mitigate the exodus and launches programs in the neighboring countries to make them more attractive for the refugees. In November 2015 the EU launched the “Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa "with a budget of €1.8 billion. It is intended for a large number of African countries, the poorest and the most affected by migration. Countries in the Sahel region and Lake Chad, Horn of Africa and North of Africa, benefit from funds intended to increase the standard of living and to discourage migration. The EU in partnership with the African countries intends to create jobs, invest in education and health, support the enforcement of laws to prevent conflicts and establish projects meant to improve migration management (European Commission, 12 November 2015).
In response to the refugee crisis in Syria, EU established a Trust Fund with a budget of €390 million aimed at helping the Syrian refugees and the host communities in Lebanon, Turkey, Jordan and Iraq. Refugees will benefit from protection of healthcare services, strictly necessary goods and services and in the host countries the EU will initiate education programs and professional development for a more rapid reintegration of the refugees (European Commission, 17.02.2016). Through these measures the EU aims to resolve the root causes of irregular migration and forced displacement. It wants to prevent illegal migration and human trafficking and help the return and reintegration of migrants in their home country or in a safer, neighbouring country. These measures are more than welcomed, but their results will be seen in time, and Europe needs an immediate solution.
The asylum system of the member countries is overloaded and reception areas hardly cope with the endless wave of migrants. Under these circumstances, the European Council, under Article 78(3) of the Treaty on the Functioning of the European Union (TFEU), proposed a temporary European relocation scheme for asylum seekers who are in clear need of international protection. In September 2015, the European Home Affairs Ministers decided to relocate over the next two years 160,000 refugees from Greece, Italy and other countries affected by the refugees’ crisis. The EU budget will allocate for this plan €780 million, respectively €6,000 for each person relocated. The distribution will be made based on a determined quota, calculated by means of objective, measurable criteria, meant to reflect the country's ability to absorb and integrate refugees. So, they took into account the population size, gross domestic product (GDP), unemployment rate and absorption of refugees from the previous years.
Assigning a determined quota strained the relations between Berlin and Eastern Europe. Although Romania, Slovakia and Hungary voted in the Council of EU for Justice and Home Affairs, against the system of migrant relocation according to obligatory quotas, the scheme was approved. The member countries will be involved on principles of solidarity and shared responsibility that governs them, except for Denmark, UK and Ireland, countries which have not signed the Treaty on the Functioning of the European Union. However, Ireland announced that it wants to take part in the resettlement efforts, and Denmark agreed to receive 1,000 refugees without reference to any predetermined quota. The UK has not agreed the quota system established by the European Commission and is not considering joining a common asylum process with the EU members. They want to do things their own way, so in 2015, 1,000 Syrian Refugees were resettled in UK, and according to the Prime Minister David Cameron, the country would accept up to 20,000 Syrian refugees over the next 5 years from the camps in Turkey, Jordan and Lebanon (GOV.UK, 7 September 2015).
If some countries opposed the mandatory quotas, on the grounds that they violate their national sovereignty, the population opposes redistribution, fearing for their safety. Because of the recent terrorist attacks, Muslims are wrongly identified with terrorists and so the feeling of compassion is replaced by fear in the hearts of Europeans. The sexual assaults against women on New Year's Eve in Germany, the armed attack of the Amsterdam-Paris train etc. increased the outrage of Europeans towards immigrants. European nationalist parties, such as: Austrian Freedom Party, French National Front, Dutch Freedom Party, Danish People's Party, Finns Party, Sweden Democrats, Jobbik party etc have been gaining more and more followers. They strongly criticize the Schengen area on the grounds that it is an open door for migrants and criminals. Europeans fear that Muslims will never integrate in Europe, given that the two cultures are so different. As a first step in the integration process of Muslim immigrants, in some European countries like: France, Belgium etc., for security reasons but also in support of women's rights and freedoms, women were prohibited by law to wear burqas in public spaces. Contrary to the vision of Europeans, many Muslim immigrants regard this law as one against Islam and an insult to Muslim women.
Because of these internal tensions, and the logistical problems encountered, the refugee resettlement program did not live up to the expectations. After five months of its launch, only 497 refugees have been relocated (UNHCR, 16.02.2016). The countries` lack of experience but also the difficult asylum procedures are some of the reasons for the member states' delays in implementing the necessary preparations for the operation of the programme. Furthermore, according to European regulations no person will be relocated from the most affected Member States without first having had their fingerprints taken. Because Italy and Greece failed to build and make the required number of registration centers for refugees operational, the whole process slowed even further. In this context, migrants lose confidence in the relocation system, avoid the reception centers in Greece and Italy and seek illegal ways to reach the countries of North West Europe. Even if for the EU countries 160,000 refugees seems like a very big number, it is not sufficient given that in the first two months of 2016, in 123,395 migrants have reached Greece already, a number that will grow rapidly as the weather improves (UNHCR, Data, 2016).
Another measure proposed by the European Commission, in order to respond to the current migration crisis, is resettlement. The Commission has adopted a recommendation of the UNHCR, asking Member States to resettle 22,504 people from outside the EU, in clear need of international protection, based on the mandatory quota system. So, refugees will be brought in the EU, without further exposure to the dangerous journeys that have made so many victims lately. By the end of 2015, 3,358 refugees have been resettled. To achieve this objective, the EU assigned €50 million to the member countries for the years 2015 and 2016 (European Comission, 10.02.2016).
4. The Effects of Schengen Suspension
Having a population of 500 million, the EU received in 2015 1 million refugees, fewer than the ones accepted by Lebanon which has 5 million inhabitants. With so many countries being involved, they cannot agree on how to solve the refugee crisis. EU values that urge to solidarity lost their importance, as each country is pursuing its own interest. More and more member states have reintroduced border controls, making the EU look like a fortress, contrary to the liberal principles on which it was created.
The EU target of lifting all internal border controls by December, so that there can be a return to a normal functioning of the Schengen area by the end of 2016, seems to be too ambitious. Given that stability, order and security in Europe is threatened, many European officials propose to suspend the Schengen agreement for two years. The suspension of the agreement would be a very clear signal that the entire process of economic integration that Europe has fought for, is about to fall. While intra-community mobility of the citizens would be hampered, the economic cost of this measure is estimated by the European Commission between €5 and €18 billion annually. This sum includes the costs to transport goods, the costs of cross-border workers, who will lose more time, and the losses suffered by tourism operators given that the sector will narrow. The European Commission study also takes into account the administrative money that governments will spend on equipment and personnel meant to assure control of the borders (European Commission, 04.03.2016).
Another study made by the analysts of the investment bank Morgan Stanley has concluded that a possible collapse of the Schengen system will cause a loss of €28 billion to Europe's economies. The costs of cross-border travel and the disruption of internal trade will reduce EU`s GDP by 0.1%. The US bank study and the publication France Stratégie estimate that the trade within Europe would fall by 10-20% due to reinstated customs checks. The loss is significant given that the commercial distribution of goods sold annually in the European market is around €2,800 billion. It is assumed that labour mobility, financial flows and foreign investment will be affected too, but it is difficult to commensurate the exact level. If with the re-establishment of border control, the common visa policy will drop, this will definitely have a negative impact on tourism in the Schengen Area.
The European officials` concern against the vulnerability of the Schengen system is obvious. Jean-Claude Juncker, President of the European Commission and Jeroen Dijsselbloem, President of the Eurogroup, cautioned that the Eurozone itself will be in danger if the Schengen space will collapse. German finance minister, Wolfgang Schäuble argued that any suspension of the Schengen area will endanger the EU project. The promise of the European Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos, that „the creation of the Schengen area is irreversible” (European Commission, 12.06.2015) may lose its veracity in the next month. Freedom of movement shrinks distances in Europe, increases international cooperation, trade and contributes to a peaceful resolution of disputes. Unfortunately the EU asylum policy has proved ineffective, and the leaders of the member countries seem to be unable to find effective solutions against the international humanitarian crisis. The future of the Schengen agreement, that has been a European symbol of solidarity and harmony among nations for 31 years, is nowadays uncertain.
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