Guest writer Yannis Karamitsios analyses the top gains for Romania after the country’s full Schengen accession.

Romania and Bulgaria are the newest members of the Schengen Area. Border controls were lifted for air and sea travel on 31 March 2024 and land border controls on 1 January 2025, more than 17 years after they acceded to the European Union.

The Schengen Convention establishes the complete abolition of systematic internal border controls and a common visa policy. The Schengen Area operates very much like a single state for international travel purposes with external border controls for travellers entering and exiting the area, and common visas, but with no internal border controls. It currently consists of 29 European countries (mostly but not only EU members) covering a population of over 450 million people and an area of 4,595,131 square kilometres.

Bulgaria and Romania have technically met the Schengen accession criteria since 2011, and the European Commission and the European Parliament have repeatedly expressed their support. However, political opposition—mainly from the Netherlands and Austria—had previously delayed their accession through the side of the EU Council.

Schengen membership offers a wide range of financial benefits for Romania, as it enhances its position within the European Union (EU) and facilitates economic integration, trade, investment, and tourism. Below are the key financial advantages for the country:

1. Increased Trade and Market Access

One of the most significant financial benefits of Schengen membership is the seamless access to the single European market. By eliminating internal border controls, Schengen allows Romanian goods and services to flow more freely to 28 other European countries. For Romania, this translates into lower costs for businesses engaged in cross-border trade. The absence of customs checks and border delays reduces transportation costs, streamlines logistics, and minimizes the administrative burden on companies.

Romania’s key trading partners are mostly within the EU: Germany, Italy, Hungary, France, Bulgaria, Poland. Schengen membership makes trade with these countries smoother, faster, and more cost-effective. This improved market access supports Romania’s export-driven sectors, such as machinery, automotive parts and agricultural products.

2. Increased Foreign Direct Investment (FDI)

Schengen membership enhances Romania’s attractiveness as an investment destination. The free movement of people and goods across Schengen borders makes it easier for multinational companies to establish operations in Romania.

Foreign companies are now more likely to invest in Romania, knowing that they can move both goods and personnel freely within the Schengen Area. Additionally, Schengen membership may also attract investments in sectors such as logistics, transportation, and services, as businesses benefit from Romania’s strategic location and proximity to other European economies.

3. Labor Mobility and Remittances

Schengen membership promotes the free movement of labor across its member states. This offers Romanian workers enhanced access to employment opportunities in other Schengen countries, particularly those with higher wages and lower unemployment rates. This increased mobility allows Romanians to seek jobs in countries like Germany, France, and the Netherlands, which are major destinations for Romanian labor.

While this might lead to some short-term workforce shortages in certain sectors, the remittances sent back by Romanian workers abroad significantly contribute to the country’s economy. In 2020, for instance, remittances were a crucial source of income for many households in Romania. The financial inflow from these remittances supports local economies and consumer spending, which in turn boosts domestic demand for goods and services.

4. Improved Security and Reduced Costs

Another financial advantage of Schengen membership is the enhanced security cooperation among member states. The Schengen Information System helps law enforcement agencies in different countries exchange information on criminal activities, which improves the overall security environment. SIS is the most widely used and largest information sharing system for security and border management in Europe. Competent national authorities, such as the police and border guards, are able to enter and consult alerts on people and objects in one common database. These people and objects can be located anywhere within the EU and the Schengen area during border, police or other lawful checks.

Reduced criminal activity and fraud also lower security costs for businesses, reducing the financial burdens they face in terms of insurance, security services, and legal compliance.

5. Political impact

Finally, Schengen membership strengthens Romania’s political and economic integration within the EU. As part of the Schengen Area, Romania benefits from the broader EU framework, which ensures stability, predictable policies and economic support. This integration boosts Romania’s credibility on the global stage and enhances its financial standing by facilitating access to EU funding programs.

Schengen admission will likely help pro-EU parties in Romania and Bulgaria. EU public sentiment towards Schengen is likely to remain positive. Romania’s accession to Schengen will come at a time when several members are reintroducing border controls.

Some estimates

Victor Negrescu, vice-president of the European Parliament (PSD/S&D), predicted that Romania's GDP could increase by up to 2% in 2025 after joining the Schengen area. Romanian Finance Minister Marcel Boloș described the development as a "game-changing moment" for the national economy. With border controls removed, "carriers will save millions of euros annually, and Romanian products will reach European markets faster and at lower costs," he stated.

According to the European Economic and Social Committee, non-full membership in the Schengen area had cost Romania EUR 2.32 billion in annual revenues from not participating fully in Europe’s border-free regime. The losses for its transport operators amounted to another 90 million annually due to delays at the country’s land borders. All this is about to be recovered.

In conclusion, Schengen membership offers Romania significant financial advantages by facilitating trade, investment, tourism, and labor mobility. These benefits promote economic growth, increase job opportunities, improve security, and enhance Romania’s attractiveness as an investment destination.

Yannis Karamitsios is a lawyer who comes from Greece and lives in Brussels. He is an active member of the European federalist movement, and author of the book ‘Time for a European Federation’ (Peter Lang, 2021).

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