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RENEE MONTAGNE, HOST:

The European Union considers its borderless travel zone one of its greatest achievements. Once inside what's called the Schengen zone of 26 European nations, there are no customs or immigration controls. Now a river of refugees and migrants flowing north from the Mediterranean is testing that freedom of travel and Europe's sense of self. Austria has taken to searching vehicles on its border with Hungary, creating 12 mile-long traffic jams as it searches for undocumented migrants. With no agreement on who exactly is responsible for those pouring in, German Chancellor Angela Merkel yesterday warned, quote, "if Europe fails on the question of refugees, then it won't be the Europe we wished for." Peter Spiegel is the Brussels bureau chief of the Financial Times, and he joins us now.

Good morning.

PETER SPIEGEL: Good morning, Renee.

MONTAGNE: Is any country in Europe putting out the welcome mat for these refugees and migrants?

SPIEGEL: Well, Germany is, and this is, I think, probably unique because of Germany's history. You know, obviously they have sort of a still, you know, historical duty, I think, they feel - and Merkel has said this - to welcome refugees because of the Nazi atrocities of World War II. Sweden also has been another country that has gone above and beyond to resettle refugees and others who have washed on Europe's shores.

But other than those two countries, that's been about it. And it's combined with sort of the economic malaise that continues to fall out from the eurozone crisis. So you have sort of populist parties already rising and sort of anti-euro, anti-EU sentiment coupled with sort of these demands from Brussels that everyone do their share to take on sort of these unwatched masses of refugees. So it's really become a - politically combustible.

MONTAGNE: Well, in some cases it's rather understandable, like Spain and Greece, which have barely emerged - or not at all in Greece's case - from very difficult financial times. They have high unemployment rates. And they are under a lot of pressure 'cause they're closest to where some of these people show up in the first place. So what, in fact, are the options? I gather there's talk of a quota system.

SPIEGEL: The quota system has actually been proposed already. About six months ago, we had a capsized ship that was heading towards Italy from the Mediterranean in which hundreds of refugees died. The immediate response from the European Commission here in Brussels was exactly that - propose a quota system with a sort of a contribution key. Very complicated how they got to this number - you know, based on the size of your country, the size of your economy, your history of accepting refugees.

But what has emerged is actually an East-West division. I mean, you mentioned in the intro these flows coming in from Hungary. The people who have been most opposed to this are the Hungarians and the Poles and the Czechs and sort of these poor new member states from Central and Eastern Europe, who frankly have no history of accepting refugees. And, again, they are poorer.

So when the European Commission says you must accept hundreds of new residents when they don't have the infrastructure or the history, that's where the real dividing lines have become. We've seen some really frightening scenes in - for instance in, Budapest's train station where the Hungarians have basically said, get on that train and go to Germany. We don't want you here.

MONTAGNE: Well, just briefly, how much does this bring up the question of can European projects continue to be viable?

SPIEGEL: I mean, this project is built on trust. And if the German people cannot trust the Hungarians or if the French cannot trust the Italians to do proper border checks, this whole system falls apart. And that's what Merkel has said yesterday when she was very, very tough, frankly, on this issue. We need to be able to trust our Eastern partners, our Eastern neighbors. If you're not conducting proper background checks, if you're conducting proper border checks, like the Hungarians aren't, this whole thing falls apart. And that's what people are really, really nervous about.

MONTAGNE: Peter, thanks very much.

SPIEGEL: My pleasure.

MONTAGNE: Peter Spiegel is with the Financial Times, speaking to us from Brussels. Transcript provided by NPR, Copyright NPR.

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