Having fought tooth and nail to keep Greece within the Eurozone, she is now fighting for the basic principles of the EU.

One of the central planks of the EU is the freedom of movement of people, goods and services, yet the current migrant crisis is causing massive friction within Europe and calls for border controls — which goes against that principle.

When 26 EU countries agreed to join the Schengen Zone — a no-borders area where passport checks and security were dropped — nobody could have envisaged the mass diaspora from Syria, Afghanistan and Eritrea — countries riven with war, oppression and religious extremism.

The hundreds of thousands now making their way into Europe and doing so via the outer borders of the EU — places like Greece and Italy.

Angela Merkel told reporters:

"Europe as a whole needs to move. Member states must share responsibility for asylum-seeking refugees. If we don`t arrive at a fair distribution then the issue of Schengen will arise — we do not want that."

"We stand before a huge national challenge. It will be a central challenge not only for days or months but for a long period of time," said Merkel.

Tough Times Ahead

The German Chancellor has her work cut out. The UK — which together with Ireland opted out of Schengen — has refused to take part in a quota allocation system, which the EU itself has failed to agree. The UK Home Secretary Theresa May has said that only European migrants with a confirmed job should be allowed into the UK, arguing that current levels of migration are unsustainable.

Denmark also refused to take part in the quota system. Hungary has built a 175km razor wire fence to try to prevent swathes of migrants from entering. Austria has introduced border checks on all train and road crossings to try and hunt down traffickers, following the deaths of 71 people last week.

Merkel has remained adamant that she will not allow the European dream to be blown off course. Over the Greek bailout, she defied her own finance minister Wolfgang Schäuble, who said a Grexit would be the best outcome. Many criticized her for imposing a German solution on a Mediterranean country in crisis.

Now over migration, Merkel is determined to fight for a pan-European solution. "Germany is strong, and we are going to step up," she said at her annual press conference.

"If Europe fails on the question of refugees, then it won`t be the Europe we wished for."

Germany is set to take in 800,000 migrants in 2015. Merkel will have a tough job persuading her other European neighbors to match that as a proportion of their populations.

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