German Chancellor Angela Merkel said on Monday that Europe was "vulnerable" in the refugee crisis because it was not yet in control of the situation to the extent that it would like to be.
"Now all of a sudden we are facing the challenge that refugees are coming to Europe and we are vulnerable, as we see, because we do not yet have the order, the control, that we would like to have," Merkel said at a business event in Mainz, near Frankfurt.
She also said the euro was "directly linked" to freedom of movement in Europe, adding: "Nobody should act as though you can have a common currency without being able to cross borders reasonably easily."
Merkel said that if countries did not allow their borders to be crossed without much difficulty, the European single market would "suffer acutely" - meaning that Germany, at the centre of the European Union and its largest economy, should fight to defend freedom of movement.
The EU has struggled to cope with a tide of refugees from war and poverty in the Middle East and Africa, most of whom have landed in Greece or Italy before heading for wealthier northern EU states. Germany has taken in the bulk of them: more than a million last year alone.
Some EU countries have re-established border controls within the passport-free Schengen zone, where they had been abolished, while efforts to share out the asylum-seekers across EU member states have floundered.
Merkel said that, to preserve the Schengen zone within the EU, it was necessary to make the bloc's external borders more secure.