Britain's Prime Minister David Cameron attends a working session of the G-20 Summit in Antalya, Turkey, Sunday, Nov. 15, 2015. (AP Photo/Susan Walsh) Image Credit: AP

Schengen is a small village in Luxembourg near where its border meets France and Germany. Thirty years ago, most leaders of what was then the European Economic Community gathered there and agreed a plan for a borderless Europe. In 1995, this was implemented. Today, 26 member states of the EU are either members of “Schengen” or committed to becoming so. Only Britain and Ireland opted out.

Maastricht is a small town in the Netherlands. There, in 1992, the Community was turned into the European Union, and the creation of the euro was agreed. Today, 26 EU members are either in the eurozone or committed to joining it. Only two countries — Britain and Denmark — have opt-outs. We have all witnessed the fate of the eurozone since 2009. Events have called into question its very existence. Now the volume of migration from the Middle East and Africa is calling into question the very existence of European citizenship. First the problem was money; now it’s people.

This week, the two most important national leaders in the EU confront what the migration problem means for the future of Europe. Back in September, Angela Merkel, the German Chancellor, stood up like a sturdy, Teutonic Statue of Liberty and declared that her country would take pretty much the lot, then estimated at 800,000 in the year. Refugees are now entering Germany at an average rate of 10,000 a day. The German people are not pleased.

Last Thursday, her finance minister and most powerful colleague, Wolfgang Schauble, accused Merkel (without naming her) of being a “careless skiier” who has caused an “avalanche”. Twenty-five years almost to the day after Geoffrey Howe accused Margaret Thatcher of being the captain who broke her team’s bats before they walked on to the pitch — thus setting her downfall in train — this felt dangerous.

Because of “history” (code-word for Hitler), modern German leaders can express German greatness only through being ultra “European”. By letting in so many, Merkel was seeking to show that Germany is the least nationalistic country on earth and to set an example to the EU about welcoming migrants — Lebensraum in reverse. But in fact her action was a unilateral assertion of German power, and therefore greatly resented by many partners. After all, if what will surely amount to more than a million non-European people can come and live in Germany and thereby acquire EU-wide rights, Merkel is exporting the problem as well as importing the people. Far more of those on the move seem to speak English than German. A significant percentage will probably end up with us in Britain, though we have not been consulted.

Leading the effort

Across Europe, Merkel’s action has only made the wire go up faster. It seems an age since the Hungarian prime minister, Viktor Orban, was a media pariah for trying to keep migrants out. Now even virtuous Sweden is re-imposing its border restrictions. And, despite her rhetoric, Merkel is leading the effort to pay Turkey to keep people out of Europe and ordering Balkan countries to exercise greater control.

Germany has reimposed the “Dublin rules”, which it had suspended, under which EU migrants must be dealt with by the first EU country they enter. As with the euro crisis, in which Greece has been forced to submit its budgets and even its political independence to EU power driven by a German motor, so poorer member states and those contiguous to Germany are being coerced by the combined effects of Schengen and Merkel. The European Germany which her predecessor Helmut Kohl praised and the German Europe against which he warned seem to come, in practice, to much the same thing. Whatever an international agreement says, people will ultimately reject it if they think it subjects them to intolerable burdens. As the President of the European Council, Donald Tusk, put it this week: “The future of Schengen is at stake.”

Reality is testing it severely, as it is still testing the euro. Schauble perhaps senses this, and is positioning himself for the end of the Merkel era of idealistic Europeanism.

The second of the two main EU leaders contemplating this mess is, of course, David Cameron. At the beginning of 2013, when his Bloomberg speech launched his EU membership referendum plan, he said: “What Churchill described as the twin marauders of war and tyranny have been almost entirely banished from our continent.”

The overriding EU objective now was “not to win peace, but to secure prosperity”. He did not so much as mention current migration. Since then, however, those twin marauders have been quite busy. Russia has changed the borders of Europe by force, and the war in Syria has driven millions of people from the region our way.

This week, Cameron sent his Government’s pre-referendum demands for EU reform in a letter to Tusk. The most politically important of them is his desire to impose a qualification period of four years before immigrants can claim British in-work benefits or social housing: the net migration of 300,000 a year is “not sustainable”. It is most likely on this subject — the Britain’s right to control whom it lets in — that he will win or lose this referendum. It is hard to calculate Cameron’s power in this. In the Bloomberg speech, he declared: “I don’t just want a better deal for Britain. I want a better deal for Europe too.” But the passage of nearly three years seems to have convinced him that he cannot win allies for pan-European reform.

Today he just wants more British exceptions. He says the referendum decision is of generational importance to the country’s future, yet also that it does not require all that much change to get what we want. He has to convince the European partners that he really does want to stay - because if not, why should they give him anything? On the other hand, he has to persuade British eurosceptic voters that he truly is prepared to leave if he does not achieve major changes. Neither side is convinced. Yet as one looks at how the European continent is changing, almost all the trends make moderate euroscepticism look better and “ever-closer union” (the treaty commitment from which Cameron wants Britain absolved) look worse. It is for people like Merkel, not Cameron, to explain how the euro is going to rescue the economies of southern Europe and how the peoples of Europe will tolerate a union without internal borders as millions of non-Europeans acquire the right to roam within it. Her country is at the heart of the burning building. Britain, with its opt-outs, has some of the escape routes. Like most eurosceptics, I feel frustrated that Cameron is not making stronger demands. Unlike most, however, I am not so sure that his mission is doomed. In private, he compares his referendum campaign to a plane that has now taken off and cannot yet be sure exactly where it will land. Certainly not an easy situation, but better, perhaps, than that of Merkel, whose wings seem to be melting like those of Icarus.

— Telegraph Group Limited, London 2015