Just at the border in Luxembourg is a little village called Schengen and we found ourselves stopping off there for a night enroute from Germany to Belgium. Sitting at a little bar/cafe overlooking the river and with a chateau behind us we were amazed at how busy this little bar was in such a small village and we had a feeling there must be more to this place than we thought. As it turned out the cafe/bar we were sitting drinking beer in was actually attached to the Musee Europeen Schengen and again we thought it strange that such a small village should have a museum. Taking in our surroundings more carefully we noticed lots of things bearing the European Union Flag and a large chunk of the Berlin Wall mounted on the riverbank. It turns out that in Schengen on June 14 1985, representatives of five EU member states Germany, France, Belgium, Netherlands, and Luxembourg met on a passenger ship near Schengen to sign an agreement eliminating border controls and this agreement was called The Schengen Agreement.
This certainly explains why travelling through all these different European countries on our trip we were only asked for our passports going in and out of the UK!!!