Vatican City (AFP) - Pope Francis said Friday he dreamed of a Europe in which "being a migrant is not a crime", as he urged EU leaders to "tear down the walls" and build a fairer society.

Invoking the memory of the EU founding fathers' pursuit of integration in the aftermath of World War II, the pontiff said they inspired because they had "dared to change radically the models" that had led to war.

"Today more than ever, their vision inspires us to build bridges and tear down walls," he told a Vatican audience including German Chancellor Angela Merkel, who has been at the centre of the EU's attempts to resolve its biggest refugee crisis since the war ended in 1945.

And in a rhetorical flourish with echoes of Martin Luther-King's legendary 'I have a dream' speech, the pope said he dreamed of a new European humanism that embraced the poor, the elderly, the young and the sick.

"I dream of a Europe where being a migrant is not a crime but a summons to greater commitment on behalf of the dignity of every human being," he said.

Francis's comments came in a speech as the 79-year-old pontiff was presented with the EU's Charlemagne Prize for his contribution to European unification.

Having unexpectedly decided to accept the award, Francis delivered a typically hard-hitting message to listeners that also included the heads of the EU's main institutions, the Council, the Commission, the Parliament and its central bank.

"What has happened to you, the Europe of humanism, the champion of human rights, democracy and freedom?" he asked. "What has happened to you, Europe, the home of poets, philosophers, artists, musicians, and men and women of letters?"

Francis has made the cause of migrants trying to reach Europe one of the defining themes of his papacy.

He has regularly railed against the "indifference" of western societies to their plight and last month he made a high-profile visit to Lesbos, the Greek island on the frontline of the crisis, returning to the Vatican with three Syrian families seeking asylum from the civil war ravaging their homeland.

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- A memory transfusion needed -

He has also attacked what he says is an arbitrary division being made between asylum seekers and so-called economic migrants -- a distinction at the heart of Merkel and other EU leaders' vision of how to resolve the crisis.

Borrowing a phrase from writer and Holocaust survivor Elie Wiesel, the Argentinian pontiff said Friday that Europe needed a "memory transfusion" to free itself from the temptation of "quick and easy short-term political gains."

And after that reference to the migrant crisis, Francis went on to say Europe had to fundamentally change its economic model to give the continent's youth the security they needed to build a new world.

"If we want to rethink our society, we need to create dignified and well-paying jobs, especially for our young people," he said.

"To do so requires coming up with new, more inclusive and equitable economic models, aimed not at serving the few, but at benefiting ordinary people and society as a whole.

European Commission President Jean-Claude Juncker and European Parliament President Martin Schulz explained the decision to give the award to such a regular and prominent critic of the EU in a column for France's Le Monde.

"Some will joke that the European Union must be in a bad way if it is in need of papal assistance," they wrote.

"We are convinced that Pope Francis deserves this prize, however, simply because he has sent Europe a message of hope.

"Perhaps we needed an Argentinian to turn his outsider's gaze on the innermost values which bind us Europeans together, to remind us of our strengths.

"After all, at times when the words 'Europe' and 'crisis' are often uttered in the same breath it is easy to forget what Europe has achieved and what it is capable of."