The record influx of refugees into Germany is the biggest challenge the country has faced since reunification 25 years ago, Vice Chancellor Sigmar Gabriel said on Sunday.
The number of asylum-seekers in Germany is expected to hit 800,00 2015, as people from Africa and the Middle East flow into Europe fleeing poverty and war.
Gabriel criticised the passiveness of other European nations in the refugee crisis.
He told public broadcaster ARD that the refugee issue "is a collective duty, the biggest challenge since reunification" in 1990, which forces Germany to "do much more" and "radically change its policies."
Germany is struggling to accommodate a wave of asylum-seekers from war zones such as Syria but also migrants from countries that are not at war like Albania and Kosovo.
The surge in asylum demands this year -- a four-fold increase over 2014 -- has left German authorities scrambling to house the migrants, with schools and tents used as temporary shelter.
Gabriel said he thinks the migrant crisis is the 28-member European Union's most pressing issue.
"I believe also that it is Europe's biggest challenge, more so than Greece and the financial crisis," he said, adding that it was an "enormous shame" that "the majority of EU members say 'This does not concern us at all.'"
"Europe is, in some regards, in a deep sleep and is still in 'holiday mode'," he said.
Gabriel said it was "shameful" that the United Nations was intervening in Greece when it should be putting its efforts into helping the refugees in Lebanon or Jordan.
Foreign Minister Frank-Walter Steinmeier joined his fellow Social Democrat Gabriel this week in making a joint plea for the EU's asylum policy to be revamped.
"It is necessary to share out refugees in Europe fairly," the two said in the Sunday edition of the Frankfurter Allgemeine newspaper.