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Photographer: PEDRO ARMESTRE/AFP/Getty Images Photographer: PEDRO ARMESTRE/AFP/Getty Images

The European Union's Schengen Agreement on borderless travel has been a boon to its citizens -- a popular and valuable convenience, as well as a potent symbol of political and economic integration. After the Paris atrocities and amid an ongoing refugee crisis, this system is in peril. To save it, Europe would have to make far-reaching changes.

A borderless zone spanning many countries presupposes, among other things, uniform control of the external border, a unified policy on refugees, and cooperation among national police and security services. Europe proclaimed its Schengen era with none of these prerequisites in place.

The pattern may seem familiar. Europe's single currency served the immediate practical purpose of promoting trade as well as symbolizing the EU's larger ambitions. But to succeed, it also demanded, at minimum, fiscal burden-sharing and full financial-market integration. For lack of those innovations, the euro project failed its first great test.

Dismantling the euro in an orderly fashion is close to impossible; those missing fiscal and monetary reforms therefore remain indispensable. Dismantling Schengen would be far more straightforward -- regrettably, all too much so. In fact, the dismantling is already under way, with France closing its borders and other countries suspending various Schengen commitments, all on a supposedly temporary basis.

The challenge for Europe is to recast Schengen into a workable form. The goal should be to balance citizens' ability to travel freely with the less palatable policies that are needed to support that commitment.

The EU spends essentially nothing on joint control of its external borders, leaving the job to its various national authorities. Its members' policies on refugees are in total disarray, with countries unfortunate enough to be close to Syria and other conflict areas left to deal with the problem alone or pass it along to their neighbors. Joint arrangements to support the efforts of countries that are on the front lines and/or more generously inclined have been grossly inadequate.

Europe's Refugee Crisis

Cooperation on security and intelligence is potentially even more contentious. With Islamic State posing so grave a threat to Europe's safety, national security services need to cooperate far more closely, not just sharing information but also conducting joint anti-terrorist operations -- even though centralizing these functions would rightly arouse anxiety among many of Europe's citizens.

The dissolving of internal borders -- like the dissolving of national currencies -- creates challenges that are best addressed by action at the transnational level. But, thanks to the euro, the EU's transnational ambitions were in retreat even before millions of refugees and the mass murderers of Islamic State turned up. The very stresses that call for further EU reform make that reform more difficult.

Dismantling Schengen altogether, if it came to that, would be a serious loss. But it wouldn't be a disaster. In itself, it wouldn't affect the right of EU citizens to work and reside anywhere within the EU. (Recall that the U.K. and five other EU countries aren't in the Schengen area.) Moreover, insisting on Schengen at any cost would be less likely to advance Europe's prospects of further integration than to provoke an even fiercer backlash against the EU and all its works. Temporary resumption of some border controls, partly to improve security and partly in deference to popular demands, need cause no gnashing of teeth.

Short-term flexibility of that kind is the best way forward, though it ought to be combined with an urgent resolve to change Europe's approach to the external borders, refugees and terrorists. If the EU cannot bring itself to act as one in those areas, it will have to curb its ambitions, and choose its inspiring symbols more carefully.

--Editors: Clive Crook, Mary Duenwald.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net .