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Editor’s Note: The following report is excerpted from Joseph Farah’s G2 Bulletin, the premium online newsletter published by the founder of WND. Subscriptions are $99 a year or, for monthly trials, just $9.95 per month for credit card users, and provide instant access for the complete reports.

WASHINGTON – The worst economic crisis in decades in Europe is helping fan an effort that could undermine the very foundation that helped establish the European Union in the first place, according to a report from Joseph Farah’s G2 Bulletin.

Within the Eurozone, there is freedom of movement for people who can go to any one of the 27 E.U. countries to find work. This freedom of movement. which also includes goods and services, is enshrined in the so-called Schengen Treaty, which a number of countries with serious economic issues want to modify in an effort to preserve jobs for their own citizens.

Now, Germany and France are leery of efforts to modify the treaty that would give the European Commission the power to decide when to allow a country within the E.U. to increase border controls.

As of now, any country within the E.U. on its own can introduce border controls for short periods under extraordinary conditions. Poor economic conditions in a number of these countries are prompting efforts to protect their labor markets against the threat of major immigration, which is occurring from the southern European countries, particularly Greece.

According to regional analysts, unemployed people from Spain, Ireland and Portugal, which are within the Schengen area, are seeing their citizens go to other countries within the E.U. and create new crisis conditions of unemployment. Many of them are heading for other Schengen area countries such as Romania and Bulgaria.

Analysts say that Greece is the main entry for illegal immigrants, especially from the Balkan countries, and Turkey. If the Greek economy deteriorates even more, analysts are concerned that legal Greek immigrants will migrate to these and other Schengen area countries.

Germany, which already has an overabundance of immigrants from Turkey, insists on a stricter immigration policy, since it appeals to more conservative elements in the country, including the rising tide of neo-Nazi elements which are affecting German internal politics.

For Europe generally, however, the increasing effort by individual countries within the Schengen area to erect border controls to curb the flow of unemployed workers is seen as reversing the decades-old trend for these countries to cede sovereignty not only in economic matters but also political affairs to supranational E.U. institutions.

Yet, these countries still can maintain their sovereignty on military and foreign policy issues. The European Commission’s efforts to impose more supranational authority over these countries, coming at a time of a deepening economic crisis, isn’t going over very well.

“The debate around Schengen clearly illustrates the basic contradiction that exists at the heart of E.U. institutions,” according to the open intelligence entity Stratfor. “Facing a potential reform of the treaty, the European Commission saw an opportunity to increase its prerogatives. Member countries viewed the commission’s intentions as a threat to their sovereignty.”

Unless the economic crisis lessens, there will be an increasing conflict between supranational integration and the call for renewed sovereignty by a number of these countries.

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