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The Schengen Area is an area between 26 countries in Europe, which abolished all kinds of border control. The area functions as one single market with one visa policy. The area is named after the town of Schengen in Luxembourg. In 1985, the Schengen Agreement was signed there.
22 of the 28 members of the European Union are a member of the Schengen Area as well. Croatia, Bulgaria, Romania and Cyprus aren't a member of the Schengen Area, but will join in the future. The United Kingdom and Ireland both have opt-outs, which prevent them from joining the Schengen Area. The two countries form together a single market with there own vise policy and border controls. Switzerland, Norway, Iceland and Liechtenstein aren't members of the European Union, but are members of the Schengen Area. There a part of the European Economic Area. Vatican City, Monaco and San Marino aren't members of the Schengen Area, but there aren't any border controls and the people who live in the nations can travel free. The three countries are so small, it simply doesn't matter. Andorra still has border controls and isn't a member of the EU.
Although the borders are open, a country can close the borders in the case of an emergency. Austria, Denmark, Germany, France, Norway and Sweden closed their borders or a part of their borders during the European migrant crisis. Most of these border controls are for a few months.