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German Chancellor Angela Merkel has always been the biggest defender of Project Europe. As the de facto European leader, her efforts to keep the euro zone and the wider European Union intact during the non-stop string of crises since 2008 – Lehman Bros., deep recessions, deflation, Greece, Silvio Berlusconi – were close to heroic, even if she was sometimes guilty of dithering before swinging into action.

The refugee crisis has become her file too. She has not dithered – far from it – but her open-door policy is dividing Europe more than pulling it together. Pity about the timing. Even though the worst is over, economically speaking, Europe is a frail beast that needs love and caring more than ever if it is to overcome past sins, such as failure to set up a proper banking union, and insulate itself from the next economic and financial assault.

Already, the Schengen open-border agreement that covers 22 of the EU's 28 member states, one of the defining features of the EU, is under threat as several countries that are overwhelmed by refugees erect fences along their borders. As the fences are going up, Ms. Merkel's popularity is going down, not just among countries on the front lines of the refugee crisis, such as Slovenia and Hungary, but among her own political allies. If she loses friends and partners across Europe, the European Project will come under threat again.

Ms. Merkel has been leader of Germany's Christian Democratic Union (CDU) since 2000 and Chancellor since 2005. As Chancellor, she had only three charmed and prosperous years before the European banks were nearly shredded alive by the collapse of Lehman Bros. Her move to guarantee €500-billion ($715-billion) of private bank deposits in Germany avoided panic in the streets.

Next up was the debt crisis, inspired by Greece and its bogus debt accounting. Here, she gets decidedly mixed reviews. She moved too late in approving Greece's first bailout, in 2010, but she did move, preventing a Greek exodus from the euro zone. Two more bailouts came, the latest in the summer, where, again, she let Greece go to the brink of economic collapse and sure exit. Greece may still be a wreck, and may yet hit the road, but the euro zone is intact, at least for now.

During the crisis years, her other big accomplishment was backing the European Central Bank's crisis-fighting measures. While the ECB is ostensibly independent, it's an open secret that Ms. Merkel or her Finance Minister, Wolfgang Schaeuble, must at least tacitly approve any radical, off-the-books moves. Under ECB president Mario Draghi, the ECB in 2012 launched a sovereign bond-buying program whose mere existence – it has never been used – took the credit for sending bond yields tumbling. A €1.1-trillion quantitative easing program, designed to fight deflation, came early this year.

The refugee crisis could prove Ms. Merkel's undoing – and the EU's. The problem is not that Europeans in general or Germans in particular oppose taking in refugees. Polls show that, in principle, Europeans feel that they have a duty to give new lives to people afflicted by war, human rights abuses, hunger and other instances of abject human misery. But more Germans and their fellow Europeans worry that Ms. Merkel opened the refugee door too widely when she declared her "welcome to Germany" policy.

By taking the moral high ground – Germany was not responsible for the Syrian civil war – Ms. Merkel became the Good Samaritan and shamed countries like Britain and Finland, which are taking few refugees in spite of Germany's pleas for a resettlement plan that would see European countries share the refugee burden.

The invitation opened the floodgates. Germany this year expects to take one million or more refugees, most of them from Syria. Up to 10,000 asylum seekers arrive daily and the flow is not decreasing as the Mediterranean turns cold, and could accelerate next year. This week, the International Organization for Migration said 28,000 migrants crossed into Greece between Oct. 30 and Nov. 1 alone. Most want to go to Germany, where the jobless rate is low and the economy strong. Sweden is the other destination of choice.

As the refugee numbers soar and the cost of processing, protecting, feeding and housing them rises by the day, Ms. Merkel is facing a revolt inside and outside Germany's borders. Barriers are going up with remarkable speed in an effort to slow the influx. Hungary has sealed off its border with Croatia. Slovenia wants to build a fence along its border with Croatia. Austria, in turn, said it would build a fence at its main border crossing with Slovenia. Serbia, Romania and Bulgaria are considering barriers too. The cherished notion of free travel inside most of the EU is dying a quick death.

The situation isn't much prettier inside Germany, where Ms. Merkel is under pressure from her own political partners as well as the usual anti-immigrant thugs to control a human influx that is clearly out of control. Horst Seehofer, leader of the CDU's sister party in Bavaria, the Christian Social Union, is putting enormous pressure on Ms. Merkel to erect border controls at frontier transit facilities where refugees can be processed before they surge into Germany. "No country in the world can accommodate a limitless flow of refugees," Mr. Seehofer told the media earlier this week.

All crises end, and the refugee one will end too, although it could endure for years. But it comes when Europe's strongest and most admired leader has a lot of work to do on the Europe Project, from creating a banking union and common deposit insurance to preventing Greece from spiralling out of the euro zone and dealing with Britain's potential departure from the EU. The refugee crisis may not prove fatal to Ms. Merkel's political career, but it has weakened her when the EU and the euro zone have never been more fragile and in need of her attention.

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