officials say number of asylum-seekers could top 600,000 this year

Angela Merkel has warned that the migrant crisis could become a bigger challenge for the European Union than the Greek economy.

The German Chancellor called on all EU nations to unite in tackling influx of migrants, as well as asylum seekers from non-EU countries in Europe.

Ms Merkel addressed the issue of asylum seekers as she condemned a recent surge in attacks on refugee shelters in Germany on Sunday.

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Stark warning: Angela Merkel warned that the influx of refugees and economic migrants seeking asylum could be become a bigger challenge for the European Union than the Greek debt crisis

The 61-year-old Christian Democratic Union leader warned that waves of refugees and economic migrants would 'preoccupy Europe much, much more than the issue of Greece and the stability of the euro'.

'The issue of asylum could be the next major European project, in which we show whether we are really able to take joint action,' she told ZDF public television.

She called for the EU to establish a list of safe countries of origin, where citizens are not under threat of violence or persecution, in order to prioritise asylum for refugees fleeing war over economic migrants.

For Germany, where some officials have said the number of asylum-seekers could top 600,000 this year, Ms Merkel said the issue posed particular challenges.

With thousands of refugees sleeping in tents and authorities saying they are overwhelmed with applications, Ms Merkel said the current situation was 'absolutely unsatisfactory'.

Challenge: Ms Merkel, seen comforting a crying Palestinian girl threatened with deportation last month, said that EU migrant crisis is 'the next major European project'

New arrivals: A group of Syrian refugees cheer as they land on the Greek island of Kos, as the most recent figures show that the number of migrants and asylum-seekers who have crossed the Mediterranean to Europe this year will pass the quarter-million mark by the end of the month

She also condemned the more than 200 arson attacks against homes for asylum-seekers seen in Germany this year, stating that they are 'unworthy of our country'.

Last week Germany's interior minister said it was 'unacceptable' that 40 per cent of asylum-seekers in his country were from the Balkans, calling it 'an embarrassment for Europe'.

About half of Germany's 300,000 asylum applications since January have come from non-EU nations in south-east Europe, including Albania, Bosnia, Kosovo, Macedonia, Montenegro and Serbia.

The UN refugee agency has said the number of people driven from their homes by conflict and crisis has topped 50 million for the first time since World War II, with Syrians hardest hit.

As the Syrians are fleeing their country's civil war, they are treated as refugees, giving them greater rights under international law than those from other countries, including Afghanistan, Iran and Pakistan, who are regarded as economic migrants.

Crisis: Migrants scuffle for clothes at a camp set near Calais, northern France, where an estimated 2,500 migrants are currently living in shacks and tents

Nearly a quarter of a million have crossed the Mediterranean to Europe this year, according to the International Organisation for Migration.

About half have come to the Greek islands, with numbers surging in the summer when calmer weather makes the voyage marginally less risky, putting the countries already strained economic resources under extreme pressure.

In Athens, local authorities have started resettling migrants living in tents in a park in the capital.

Fire brigade buses started moving migrants, most of them from Afghanistan, to a settlement of 90 containers in the Athens district of Votanikos on Sunday. Each container can house six to eight people and has air conditioning, running water and a toilet.

The government has said the place is not a detention center and that everyone is free to come and go. However, many migrants, wary of such promises, packed their belongings and left the park.