Schengen was basically a trade-off, in furtherance of the European ideal of free movement of people across national frontiers within its collective territory. The old border controls would go, and in return each country would operate external controls on behalf of the others. Among the member countries, crossborder co-operation between judiciaries and national police forces would be stepped up. Early on, when Schengen consisted of only France, Germany and the Benelux countries, the system more or less worked. Now Schengenland extends to 12 EU countries as well as Norway and Iceland, and the leaks are springing up all over - just as Britain warned.
Unlike some other No's emanating from London, our hostility has proved a resounding vindication of old-fashioned British pragmatism. Resistance was born not of a Euro-sceptic conviction that this was just another piece of trickery by the federalists: an ambitious measure they knew would require other steps to make it work and which once accepted would nudge Europe a little further towards the real goal of full political union.
The objections were legal, practical and entirely reasonable. As an island, Britain has always found it easier and more natural to operate controls at the point of entry, rather than once an immigrant was already inside the country. Furthermore, we argued, unfettered freedom of movement within Europe should legally apply not to everyone, but exclusively to EU citizens. Be idealists at your peril we warned; Schengen was no way to contain drug trafficking, terrorism and illegal immigration.That, however, was not the view of the Schengen signatories at the time. But when Spain, Portugal, and above all Italy signed on, border-free Europe became too good to be true.
The Old Continent of course has not had much luck with timing. When Schengen was first conceived, back in 1985, Algeria was at peace, Yugoslavia still existed, and Communism did Fortress Europe's job for it, employing dogs, fences and watchtowers to keep its wretched subjects from straying. In those days the few who made it were not treated as sponging riff-raff but feted as freedom's heroes. These days everyone wants to come - and, one way or another, many of them can.
In this particular case, the obvious villains are German politicians, outbidding each other on law and order in an election year, and barely veiling their ancestral prejudices against slapdash Italians who couldn't run a dog show, let alone a serious border control policy. In one breath they castigate Turkey for gross human rights violations against its Kurdish population - only to insist in the next that Kurds who do make it to Italy are simply in search of the economic good life, and should be sent home forthwith.
Whatever happens in this particular instance, there will be more of them. There will be other Bosnias and Algerias. Economic and political misery, the motors of great migrations, have not been abolished, and the world's people-smugglers and mafias, who grow rich off this misery, are a good deal more efficient than governments trying to stamp out the practice. Dealing humanely and equitably, with immigration from less fortunate lands will be a constant challenge to the EU for the foreseeable future. This time Italy is in the hot seat. But it could as easily be the French, or even us (remember that uproar not so long ago over a few hundred Czech gypsies at Dover?).
Thus the crisis illustrates some wider Euro-truths. One is that grand gestures tend to bump into unforeseen realities. So it will be with the single currency, and so it is with Schengen. Once again, the European cart has been put before the horse. Only now is the realisation dawning that if free movement of people inside the ramparts of Fortress Europe is to embrace fleeing Kurds, desperate Albanians and terrified Algerians, as well as EU citizens - then the only way to avoid distortions is to have common asylum laws and common welfare benefits for those who are allowed to stay.
In the meantime though, Schengen offers a splendid opportunity to Britain to score brownie points during its six-month stint in the EU presidency. After the Kurdish fiasco, the case for Britain signing up is weaker than ever. But the case for "constructive pragmatism" is overwhelming. We have everything to gain from developing Schengen's provisions for cross-border police co-operation, to combat drugs and international crime. Indeed, this is central to the "Europe for the People" for which New Labour strives. Just as long as we don't say, "I told you so."