BRUSSELS Estonia, the next country to chair European Union meetings, opposes punishing eastern EU states that refuse to host refugees by pulling their funds.
Interior Minister Andres Anvelt told Reuters that such a move divided Europe rather than united it.
"I don't think any punishing through budget or through some financial punishment is good because we understand Europe is a family of very different countries," he said in a telephone interview from Tallinn.
"We have to look very much into the future not to break something. We don't need any more exits, it would make the European Union weaker."
Estonia, a former Soviet republic of 1.3 million people that joined the EU in 2004, will assume the rotating presidency for the first time in the second half of the year, with one big challenge being to break an impasse over handling immigration.
Italy is furious with peers like Poland and Hungary for declining to help by taking in some of the African refugees and migrants arriving to its Mediterranean shores, despite benefiting from EU payouts that wealthier states provide.
Some 1.7 million refugees and migrants have arrived in the EU since 2014 and the bloc has been at loggerheads over how to handle them, the bitter disagreements eating at the member states' unity they desperately need to handle the loss of member Britain.
Britain also accounts for some 15 percent of the bloc's common budget, so negotiations over future financial allocations will be harder.
Anvelt said Estonia would focus on further tightening the bloc's external borders, hoping that would eventually convince Warsaw and Budapest to change tack.
After nearly two years of arm-wrestling, the bloc's executive European Commission on Tuesday lost patience and launched legal cases against Budapest, Warsaw and Prague over the matter.
The allied, nationalist-minded governments in Poland and Hungary refuse to host a single person via the EU relocation programme and their neighbours Slovakia and the Czech Republic have also been stalling.
The easterners cite security concerns for refusing to admit people from the mainly-Muslim Middle East and North Africa, given recent Islamist attacks in Europe.
So Anvelt said Estonia, which prides itself in its advanced digital agenda, would push for better and more interlinked databases to help law enforcers address security concerns.
Plans include setting up an EU travel pre-authorisation system and an "Entry-Exit" tool to better track third-country nationals travelling on a visa. The bloc also wants to better connect a dozen-or-so different databases for border management, law enforcement and customs.
"If you give a clear message that Europe is really, really starting to change its external border policy... it would be much easier to make internal policy decisions," Anvelt said.
"IT systems used in the fields of home affairs and justice... it's quite a good toolbox that the EU is not using today as much as it could."
Similar ideas often got stuck in the past in the EU, partly because of fears such powerful tools would infringe on citizens' privacy. Anvelt said that had not proven true for Estonia.
He said another area of focus was arresting smugglers' money made on trafficking refugees and migrants to Europe, their lives in peril in unfit rubber dinghies daring the Mediterranean.
"We have a lot more to do in tracking down this money. We need IT systems fit for the 21st century to do it."
(Editing by Jeremy Gaunt)