The collapse of Schengen

This is between Austria and Germany, two of the “closest” EU economies in terms of trade and similarity:

FREILASSING, Germany — Traffic along one of Europe’s busiest highways, which used to flow unimpeded, now often backs up for miles at a newly installed checkpoint, where a phalanx of German police officers screens trucks and cars for hidden migrants.

At this border crossing, as a result, Austrians who work in Germany have trouble getting to their jobs. Many companies in Germany must wait days longer for deliveries of food, machine parts and other goods. Shoppers who made quick weekend jaunts to Freilassing’s stores now mostly stay away.

“It’s really bad,” said Karl Pichler, the owner of a large gardening center here in Freilassing, whose sales of tulips, rose bushes and other plants has slumped as longtime customers from Austria have stopped coming.

…With 57 million vehicles a year and 1.7 million workers a day crossing Europe’s frontiers, the European Union could face up to 18 billion euros, or $19.6 billion, each year in lost business, steeper freight and commuter costs, interruptions to supply chains, and government outlays for augmented border policing, according to a recent report by the European Commission, the bloc’s administrative arm.

Should the European Union revert to permanent border checks to slow Syrian, Afghan and Iraqi migrants traveling through Greece and the west Balkans toward Northern Europe, the long-term cost could exceed €100 billion, the French government calculated in a separate study.

Here is the full story (NYT), and do note that long-run elasticities are much greater than short-run elasticities.  So if this continues, the longer-run effects on cross-border trade, not to mention EU governance, could be quite dire indeed.  And right now that is the default scenario.