Portugal will refocus EU on social rights, PM says

Costa, who hails from the Socialist party, sees it as a basis for the climate and digital transition, and wants to promote innovation in businesses and strong social protection "so that no one is left behind".

Costa said the North-South divide - which has dominated debates during the euro crisis - "no longer exists", because "everyone has understood that the strength of Europe lies in its diversity", that "it is this whole that creates the internal market" and "crises affect everyone".

Portugal was one of the first countries to present its national plan to the EU Commission, which spells out how it wants to use the EU recovery money, Costa said, and negotiations with the EU executive could conclude at the beginning of January.

The fund - from which €390bn will be distributed in grants - would likely begin pumping money into European economies during the summer.

National parliaments still need to approve a planned increase to the EU budget's "own resources" that would allow the commission to borrow on the markets to finance the fund.

Each country's national plan on how to use the money would be subject to review by fellow member states, a guarantee of oversight by EU countries to make sure capitals carry out their promised reforms.

Costa said the recovery fund tests a new methodology in sharing EU funds.

"It does not provide for the same freedom that each country usually has in managing European programmes. But neither is it about setting up a troika that imposes goals and reforms on us," he said, referring to the method used during the euro crisis.

On linking EU funds to the respect for rule of law - to which Poland and Hungary objected to and temporarily blocked the recovery fund and budget - Costa said the compromise approved by EU leaders last week "fixes the legal interpretation" of the new mechanism.

He stressed that the legislation on the mechanism - which is expected to get its final approval in the European Parliament on Wednesday - has not changed.

"But it must be stressed that the real guarantee, not only of the rule of law but of all the values of the EU, is the procedure of Article 7 of the EU Treaty," he said, referring to the sanctions procedure already underway against Hungary and Poland.

"There is no doubt about the effectiveness of this mechanism," he added on Article 7 - although it has been stuck in the council of member states for years.

Costa said the planned conference on the EU's future should "clearly and openly" discuss differences.

He said countries should be able to go faster in integration if they want to, without causing problems for those who want to go slower.

"What must be avoided, at all costs, is not having sufficient flexibility between each other, which could lead to a new Brexit. We have all already understood that the price to pay for an exit is too high from a political point of view," he said.

Costa said he was a "realistic" when it comes to talks on the EU-UK future relations.

Costa said it was a "good sign" that UK prime minister Boris Johnson and commission president Ursula von der Leyen decided over the weekend to give themselves more time to clinch a deal.

"If there had not been a common political will to reach an agreement, the EU and the UK would not have given each other more time. This does not mean that we want an agreement at any cost," he said, adding that "there are still challenges, but it is possible to overcome them".

Migration

One of the issues most dividing member states is how to reform the EU's asylum and migration policy, on which the commission presented its new proposals in September.

It will be one of the most closely watched legislative files that the Portuguese presidency needs to find a compromise on among member states, as countries have fought over an earlier commission proposal for years without success.

"Our priority is to reach an agreement which respects a fundamental principle: the spirit of solidarity between all the countries of the EU", he said.

The Czech Republic, Hungary and Poland - which have rejected the idea of taking in asylum-seekers as part of an EU-wide scheme - already said they disliked the new proposal.

"If we have an internal market, an area of ​​free movement, we need solidarity between all the member states to welcome refugees," Costa said, adding in times of crises quotas to share asylum-seekers are necessary.

"You have to understand that migration is part of humanity," he said, emphasising that successful integration needs to take into account the asylum-seeker's personal needs.