Danish businesses are criticizing the government's plans to tighten border controls aimed at fighting illegal immigration and smuggling.

Germany and European Union officials also blasted the Danish center-right government's decision, saying it contradicts the principles of the 25-country, visa-free Schengen zone.

The two European countries are part of the Schengen agreement and share a common border.

Danish officials defended the decision, saying it would not be a return to passport controls and did not violate any market rules.

But Danish industries warned Thursday that increased border controls would discourage cross-border business.