{"id":9556,"date":"2025-07-18T16:38:26","date_gmt":"2025-07-18T14:38:26","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=9556"},"modified":"2025-07-18T16:38:26","modified_gmt":"2025-07-18T14:38:26","slug":"how-well-schengen-has-aged","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2025\/07\/18\/how-well-schengen-has-aged\/","title":{"rendered":"How Well Schengen Has Aged"},"content":{"rendered":"

The Schengen Agreement turns forty, and it’s time to take stock. The removal of internal borders has transformed the European economy through the free movement of people, goods, and services. Formerly peripheral areas have gained centrality and become hubs of development. Administrative challenges raised by the agreement have largely been resolved through increased interstate cooperation. But the benefits are not only economic: Schengen has made European integration more tangible, as borderless spaces foster the exchange of ideas and cultures. Over four decades, crises have arisen\u2014migration waves and pandemics among them\u2014and some have even called for Schengen\u2019s dismantling. But that would come at a high cost to Europe and its citizens. Instead, what\u2019s needed is careful maintenance to ensure a strong future for the free movement area.<\/em><\/p>\n

 <\/p>\n

The quiet town of Schengen has just over 4,000 residents. Since 1985, it has become more than a small village in Luxembourg\u2014it has become synonymous with one of the European Union\u2019s greatest achievements, alongside the single currency: the removal of internal borders. Exactly forty years ago, this town on the Luxembourg-France-Germany border was chosen by the governments of those three countries, plus the Netherlands and Belgium, to sign the treaties that would, within a decade, make border controls a distant memory. The agreement was signed symbolically aboard the boat Princesse Marie-Astrid<\/em> on the Moselle River, which flows from France into the German Rhine, passing through Luxembourg. Italy joined the Schengen group in November 1990, but it took another seven years before its borders became merely black lines on a map.<\/p>\n

Today, four decades later, that symbolic gesture on the Moselle represents one of the most concrete and everyday realities of European integration. Less visible than a currency, less celebrated than a treaty, Schengen has become the invisible infrastructure supporting the single market, labor mobility, and the exchange of ideas and cultures. But it\u2019s under pressure. On its fortieth anniversary, it\u2019s worth asking: What has Schengen truly meant for the European economy? What have been the tangible benefits for citizens and businesses? And what challenges threaten this area of freedom?<\/p>\n

What Is Schengen?<\/strong><\/h3>\n

The Schengen Area is the world\u2019s largest \u201carea of freedom, security, and justice without internal borders.\u201d It includes 29 European countries that have abolished internal border controls to allow for the free and unrestricted movement of people. One of its main goals is to ensure citizens\u2019 safety through enhanced cooperation among police forces, customs authorities, and border control agencies of member states. These new forms of collaboration were introduced specifically to offset the risks associated with the removal of internal checks. The Schengen Area spans 4,718,084 square kilometers and is home to over 448 million people. It includes 25 EU member states and four non-EU countries (Norway, Switzerland, Iceland, and Liechtenstein). Some EU countries, like Ireland, do not participate, while others, like Cyprus, are expected to join soon.<\/p>\n

Schengen is not synonymous with the European Union, which is a political and economic organization of 27 member states cooperating on many common policies: the single market, trade, environment, consumer rights, foreign affairs, and more. The single market is built on the free movement of people, goods, services, and capital. Without the Schengen Agreement, however, the movement of people and goods would be hampered by checks, delays, and uncertainty. That\u2019s why Schengen and the single market are deeply interdependent.<\/p>\n

Thanks to the agreements signed forty years ago, about 3.5 million people cross internal borders every day for work, study, or to visit family and friends. Around 1.7 million live in one Schengen country but work in another, and there are roughly 1.3 billion cross-border journeys within the area each year.<\/p>\n

Benefits for Businesses<\/strong><\/h3>\n

The freedom of movement for workers, students, tourists, and businesses has produced significant gains in productivity, competitiveness, and innovation.<\/p>\n

For European companies, eliminating border checks has meant faster transport times, lower administrative costs, and greater predictability. Supply chains\u2014especially in manufacturing\u2014depend on the ability to cross multiple borders per day without delays. For example, a truck carrying auto parts from Slovakia to Germany must pass through Austria and the Czech Republic. Every hour spent waiting at the border adds costs, delays production, and increases risks to the value chain. Schengen has reduced these frictions, improving the efficiency and resilience of Europe\u2019s economic system. Of the 1.3 billion annual border crossings in the Schengen Area, 57 million involve road freight, with a trade value of \u20ac2.8 trillion. According to European Commission estimates, Schengen saves billions of euros each year in transport and logistics costs. The reduction in trade costs ranges from 0.42% to 1.59%, depending on geography, trade partners, and other factors.<\/p>\n

How Schengen Changed Work and Leisure<\/strong><\/h3>\n

Schengen has also facilitated mobility for seasonal and cross-border workers, particularly in sectors like agriculture, construction, and tourism. It has encouraged talent flows in healthcare, tech, and academia\u2014spreading skills and reducing regional inequalities. The latest EU mobility report estimates that in 2023, about 1.8 million people crossed a European border daily to go to work. Germany, France, and Poland are the main source countries for cross-border workers, while Germany and Switzerland remain the top destinations. About 120,000 Italians cross the border daily for work\u2014roughly 0.5% of Italy\u2019s labor force\u2014and for two-thirds of them, the destination is Switzerland. In Luxembourg, cross-border workers from other EU countries represent 47% of the entire labor force, mainly commuting from France, Germany, and Belgium. A European Parliament study shows that, per trip, commuters save between 10 and 20 minutes in cars and between 30 and 60 minutes in heavy vehicles like trucks and buses thanks to the absence of border checks.<\/p>\n

Improved mobility has also fueled economic development in once-peripheral urban areas. Cities and border regions have become economic hubs. A prime example is the cross-border triad of Basel (Switzerland), Mulhouse (France), and Weil am Rhein (Germany). Thanks to the removal of border controls, around 34,000 French and German cross-border workers commute daily to Basel. The area hosts major multinationals like Novartis and Roche, which recruit talent and collaborate with scientific and medical institutions from all three countries\u2014creating a highly integrated and innovative ecosystem. Shared infrastructure includes the EuroAirport Basel-Mulhouse-Freiburg, the only airport in the world jointly operated by three countries, and coordinated public transport networks that facilitate daily commutes. This model of cross-border cooperation is often cited as a success story of how Schengen has turned a former periphery into a globally relevant scientific and economic hub.<\/p>\n

And it\u2019s not just work\u2014leisure has benefited too. The ability to travel passport-free between European capitals has encouraged dynamic, fluid, multi-country tourism, including last-minute travel. Formerly remote cities have become accessible stops on international travel circuits, and many lesser-known destinations have seen tourism grow.<\/p>\n

More Collaboration on Administrative Matters<\/strong><\/h3>\n

Of course, the removal of internal border checks has created some complex issues\u2014particularly in taxation. Cross-border workers often live in one country but pay taxes in the one where they work, creating imbalances in municipal budgets. Local governments provide public services but don\u2019t always receive corresponding tax revenues. To address this, bilateral fiscal compensation agreements have been signed between local authorities of different countries. One example is the Italy-Switzerland agreement on the taxation of cross-border workers, which took effect in July 2023. It stipulates that \u201cnew cross-border workers\u201d (those who started working after the agreement came into force) are taxed in both Switzerland, where they work, and Italy, where they reside\u2014with mechanisms in place to avoid double taxation. In essence, Schengen has required deeper administrative and fiscal cooperation among national territories, laying the groundwork for joint management that goes beyond economic integration.<\/p>\n

Cracks in the Invisible Border<\/strong><\/h3>\n

Despite Schengen\u2019s undeniable benefits, recent years have brought serious challenges. The Schengen Borders Code allows member states to temporarily reinstate internal border controls under exceptional circumstances that threaten the proper functioning of the free movement area\u2014such as major risks to public order or internal security. In recent years, this clause has been invoked multiple times: during the 2015 migrant crisis, in response to terrorist threats, to curb irregular migration, to manage geopolitical crises, and during the COVID-19 pandemic. The increasingly frequent and prolonged use of exceptions has highlighted certain weaknesses in the Schengen system and sparked debate about its future\u2014even raising the once-unthinkable idea of its gradual dismantling.<\/p>\n

The economic consequences of suspending Schengen would be severe. According to the think tank Bruegel, it could cost Europe up to \u20ac50 billion per year\u2014considering only the impacts on transport, tourism, and trade. For cross-border workers, the losses go beyond time wasted at checkpoints (estimated at \u20ac1.3 to \u20ac5.2 billion) to include job opportunity losses. France alone could lose 10,000 cross-border workers, with an annual economic hit of \u20ac150\u2013300 million. For Switzerland, the share of cross-border workers could drop by 27\u201362%. There are also less visible but equally significant costs: the erosion of European citizenship, growing regional inequality, and declining trust in institutions.<\/p>\n

The Future of Schengen<\/strong><\/h3>\n

Nonetheless, Schengen\u2019s future still looks solid. A recent report by the European Parliament affirms that the Schengen Area will continue to evolve to face today\u2019s and tomorrow\u2019s challenges. The European Commission will work with member states to fully harness the potential of this \u201cborderless space,\u201d making it more resilient to geopolitical and social shifts.<\/p>\n

The priorities for the coming years fall into three main areas:<\/p>\n

    \n
  1. Governance<\/strong> \u2013 Strengthening the governance framework to improve policy coordination, implementation, and shared responsibility across institutions.<\/li>\n
  2. Security<\/strong> \u2013 Adopting a structured, coherent approach to security by enhancing police cooperation to tackle cross-border threats, overcoming current legal and operational limitations, and fully utilizing existing cooperation tools.<\/li>\n
  3. Digitalization<\/strong> \u2013 Accelerating digital systems and procedures, especially the Entry\/Exit System, to improve security and efficiency at the EU\u2019s external borders.<\/li>\n<\/ol>\n

    Forty years after the Schengen Agreement was signed, the free movement area remains one of the most symbolic and tangible achievements of European integration. Despite challenges in security, border management, and migration flows, Schengen continues to be a cornerstone of mobility, cooperation, and mutual trust among EU member states.<\/p>\n

     <\/p>\n

    Cristina Tealdi is a professor of economics at Heriot-Watt University in Edinburgh. She specializes in labor economics, inequality, and migration.<\/em><\/p>\n

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