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Not so liberal now: Europe's open doors closing fast

The Oresund Bridge between Denmark and Sweden is perhaps one of the most potent symbols of the close ties between European countries. Three decades ago the two countries opted to go passport-free as part of the Europe-wide "Schengen" zone.

But much has changed since then.

Sweden and Denmark – for years regarded as two of the most liberal countries in the world and a model for left-leaning proponents of wealth distribution -- are reintroducing border checks in response to an influx of migrants into the European Union (EU). The move has been described as the beginning of the end, the writing on the wall and adds to the growing list of countries that have brought an end to passport-free roaming across their borders.

Johan Nilsson, AFP

"Even within the EU it's a surprising development," Carsten Nickel, Senior Vice President at Teneo Intelligence told CNBC. "That's a very different story from what we have seen in the western Balkans."

In late 2015, Hungary's hardline Prime Minister, Viktor Orban, ignored accusations of xenophobia and instructed a border fence to be built to fend off migrants. Although the move was widely condemned, other European Union countries have since followed suit, and reinstated controls, including Austria and most notably Germany. After the Paris attacks, Belgian and French police also started carrying out border checks.

Although it is not the first time that borders have been temporarily closed, the spiralling migrant crisis combined with elevated security concerns are already leading to a tightening of the current rules. The EU's executive arm has proposed the introduction of checks against EU and national databases for EU citizens arriving at and leaving the 26-country passport-free area. The bloc is also planning the creation of a new European Border and Coast Guard force to patrol its external borders with a stronger mandate than its current teams.

The demise of the Schengen agreement would have serious economic consequences -- the Brussels-based Brueghel think tank says almost 1.7 million residents from Schengen countries crossed borders to go to work.

Longer queues at border controls would harm the free movement of goods within the bloc, one of the cornerstones of its internal market and a boost to economic growth, as well as a key attraction for foreign investors.

But it would also be hugely symbolic. "The longer term risk is that Europe loses credibility with investors," Nickel said.

A crisis too far?

Parallels have been drawn with the sovereign debt crisis that engulfed the euro zone in 2009-10 and from which many single currency members are still reeling. European authorities were determined to preserve the currency even in the face of mountainous debt and huge disagreement over the handling of the crisis.

"In the euro zone crisis we had a truly supranational institution: the European Central Bank. We have no equivalent in Schengen," Nickel points out.

It may take another summer of migrant arrivals and fatalities before a real solution takes shape. Nickel believes leaders will only really act when the pressure mounts, as they did in the euro zone debt crisis.

"The (European) Commission's proposal is too idealistic," he said. "I don't think we're moving towards a radical solution. "

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