Schengen anniversary overshadowed by returning border checks

Good morning. Europe is waking up to a fresh crisis in the Middle East after Israel attacked Iranian military commanders and nuclear sites in a series of air strikes. Tel Aviv says it is trying to stop the Islamic regime’s nuclear programme before it is too late.

Meanwhile in Brussels the European Commission’s powerful competition arm is blocking demands to subsidise the production of clean energy technologies, flaring tensions between officials policing state aid and those working on climate and energy.

Today, Laura assesses the sorry state of Schengen on its 40th birthday, and our competition correspondent hears a demand for Brussels to use more tools against Chinese online retailers.

Checking in

Europe’s borderless Schengen area is turning forty this weekend and in the middle of a midlife crisis, writes Laura Dubois.

Context: The Schengen agreement was signed on June 14 1985 between Luxembourg, Belgium, the Netherlands, France and Germany, allowing free travel among those countries. The Schengen area now ›includes 29 countries, with Bulgaria and Romania joining most recently.

But 11 countries, including founding members Germany, France and the Netherlands, have reinstated checks along their borders in a bid to curb irregular migration and other security threats — some of them renewing them continuously over years.

Germany most recently announced it would further intensify controls, rejecting asylum seekers at its border without assessing their claims — something a Berlin court has deemed illegal.

Germany’s justice minister Stefanie Hubig yesterday said that the interior ministry would provide a more comprehensive justification for the checks to keep them going. “This has been announced,” she said.

But the measures have deeply upset Germany’s neighbours.

“Internal border controls disrupt the common cross-border life that has developed over decades . . . we fully support the Schengen agreement and firmly reject internal border checks within the EU,” Luxembourg’s home affairs minister Léon Gloden told the Financial Times.

Poland’s Europe minister Adam Szłapka said: “Schengen and the free movement of people . . . it’s one of the greatest achievement of the European Union. And we need to do [everything] to keep it.”

Szłapka added that attempts to change the system due to a “political situation” were “always a step in the wrong direction.”

Yesterday, EU justice ministers jointly pledged to “defend the unfettered free movement of persons . . . by ensuring that the reintroduction of internal border controls remains a measure of last resort.”

It also states that countries should take “all appropriate measures . . . with respect to external border management, secondary movements, migration, the return of those illegally staying” as well as other threats.

To further paper over the cracks, Gloden, together with his Polish counterpart and EU commissioners Magnus Brunner and Henna Virkkunen, yesterday held a ceremony in the Luxembourg village of Schengen where the agreement was signed.

“Keeping Schengen going and growing is made possible only by building a finely tuned support system with strong police co-operation and effective border protection,” said Brunner, who is responsible for home affairs.

But the commission will have to decide how to exactly tune the system, and assess whether the continuous renewal of checks is justified.

Chart du jour: Let me stay

Airbnb has blamed “overtourism” in Europe on the hotel industry, responding to criticism that its service is leading to overcrowding in holiday hotspots.

Packing it in

The EU should make more aggressive use of its trade defence instruments against Chinese online retailers such as Temu and Shein, as the companies are likely to divert their trade flows away from the US towards Europe, the head of a leading French ecommerce company tells Barbara Moens.

Context: The EU is cracking down on low-cost imports from online retailers, for example by suggesting a €2 fee on small packages entering the bloc. More than nine out of 10 packages imported to the EU come from China.

The European Commission has previously warned about an increase in the number of unsafe goods available on the EU market, as well as a rise in complaints by European retailers against unfair competition.

Now, the uncertainty about US tariffs on Chinese goods is further raising the pressure, said Thomas Métivier, CEO of ecommerce platform Cdiscount.

Métivier said that Chinese retailers who shift their focus from the US to Europe “are not playing by the rules” if they flood the market with extremely cheap goods.

“When they are shipping products from China with a value that is lower than the cost of shipping, then you don’t need a five-year investigation. There is a clear dumping strategy,” Métivier said.

He said this tactic could pose a “big threat for ecommerce but also for brick and mortar retail. We already see it in the fashion industry for example and the reaction must be determined and swift”.

The proposed fee on parcels will come too late to stop the current trend, Métivier said. Instead, he urged the commission to use its existing trade defence arsenal and step up anti-dumping and anti-subsidies measures.

What to watch today

1. EU home affairs ministers meet in Luxembourg.

2. Nato secretary-general Mark Rutte, officials and business representatives attend Bilderberg conference in Stockholm.

Now read these

• António Costa: Strengthening EU defence won’t undermine the transatlantic alliance but revitalise US relations, the EU council president writes in the FT.

• Back on track: Germany is planning to prioritise its faulty railway network in its €500bn infrastructure fund designed to revive its stagnant economy.

• Art Basel: The FT’s guide to this year’s fair, including interviews with Grażyna Kulczyk and Frida Orupabo, and how to behave at a gallery dinner.