By Laurence Norman 

The head of the European Union's executive Wednesday gave his sharpest warning yet about the possible effect of a collapse of the Schengen border-free area and cautioned it could undo the bloc's single currency project.

The Schengen system has come under severe pressure in recent months because of the influx of migrants into the region -- the biggest migratory wave since the aftermath of World War II. The terror attacks in Paris have only compounded the crisis.

France and Germany are among the countries that have ramped up border controls. EU governments also are looking at revamping the system's rules to tighten the bloc's external borders and ensure a fairer distribution of asylum seekers across the bloc.

Speaking in the European Parliament in Strasbourg about the recent terror attacks in Paris, European Commission President Jean-Claude Juncker acknowledged the "Schengen system is partly comatose."

"If the spirit of Schengen leaves us...we'll lose more than the Schengen agreement. A single currency doesn't make sense if Schengen fails," he said. "You must know that Schengen is not a neutral concept. It's not banal. It's one of the main pillars of the construction of Europe."

It isn't the first time Mr. Juncker has warned about the fate of the 26-member Schengen zone. Those concerns have been echoed by German Chancellor Angela Merkel, who has said that without greater burden-sharing among EU countries the border-free system can't last. However, Mr. Juncker had not previously linked Schengen's fate to the future of the single currency.

In theory, the reintroduction of border controls wouldn't directly threaten the single currency zone. While it could slow trade across the bloc, the euro's vital underpinnings -- free capital flows, freedom of labor movement and the bloc's single market of goods and services -- would remain intact.

However, as one of the central symbols of the EU project, Schengen's collapse would likely have huge political repercussions.

A senior EU official said Mr. Juncker sharpened his warnings Wednesday because of a fear that the bloc was now facing "an existential crisis." With Brussels already struggling to coordinate an EU-wide response to the migration challenge, the terror attacks in Paris have intensified concerns in Brussels that each government will respond unilaterally, further fraying Schengen.

The commission chief has argued throughout the last few months there is no effective way of locking migrants out of the bloc and that only greater European coordination to handle the influx can meet the challenge.

Mr. Juncker said that following the Nov. 13 Paris attacks, European politicians must resist the temptation to "mix up" asylum seekers and terrorists. He said those inciting violence in the EU "are the same people who are forcing the unlucky of this planet to flee" Syria and other places.

But there are sharp divisions over migration.

Some governments have said that the open door migration policy championed by Berlin and Brussels has attracted hundreds of thousands of asylum seekers. They claim that burden-sharing plans for those already in the EU have simply diverted attention from taking key measures to tighten borders.

Others are calling for a more radical approach.

Responding to Mr. Juncker's comments in the European Parliament, Marine Le Pen, an EU lawmaker and leader of France's far-right National Front movement, said her party would fight to permanently restore national borders.

She said it was the only way to stem mass migration and secure the country against the terror threat.

She said the EU's "ridiculous, imbecile" policies were "an obstacle to securing the freedom of the French people."

Write to Laurence Norman at laurence.norman@wsj.com

(END) Dow Jones Newswires

November 25, 2015 13:52 ET (18:52 GMT)