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Tensions over the refugee crisis threaten a tightening of borders which could severely disrupt European trade.

Ashley Owen, head of investment strategies at AES International said: "The tightening of border controls in parts of Eastern Europe, as a consequence of the refugee crisis, could be the start of a worrying trend which may damage European GDP.

“The Schengen agreement allows free movement of people and goods through the majority of the European Union, and its economic impact is hard to accurately measure. However, it is fair to assume, that intercontinental trade is significantly boosted by the close country ties the agreement has enabled and that any threat to that would have consequences.

“The political friction could further threaten import and exports between European countries and put trade ties under pressure. This would unduly hit small to medium size companies which do business within Europe.

“All of this is very disappointing as the influx of such high numbers of people at working age should provide a real economic boost over the coming decades if handled correctly."

- ENDS -

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