This refers to an agreement between a number of European nations called the Schengen Agreement or the Schengen Treaty. It's little known outside of Europe, but travelers from the rest of the world often have no idea if it applies to their country or not, and are confused about what line they should join.
In pre-EU days, it expedited travel considerably for Schengen members. With the advent of the EU, being part of the Schengen agreement still eases some aspects of travel for the citizens of the member nations but now it mainly affects judicial operations. A special visa good for all Schengen nations for a time period of 90 days is also available.
The Schengen Agreement nations are:
Austria
Belgium
Denmark
France
Finland
Germany
Greece
Iceland
Italy
Luxembourg
The Netherlands
Norway
Portugal
Spain and Sweden.
If you're not a citizen of the nations listed, you are not covered by the Schengen Agreement. Stand in the other line this time which will usually also say "Non-EU" members.
You may also see signs indicating "Intra-Schengen Travel". If you're taking an internal flight in Greece, for example from Heraklion, Crete to Athens on the mainland, you are, for the time being, traveling "Intra-Schengen" no matter where you came from. Go ahead and line up.
This is a good explanation of the Schengen Treaty and how it may affect your travels between Schengen Nations. Find Airfares to Greece
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