Lisbon, Feb 2 (IANS): Portuguese Prime Minister Antonio Costa said that the European Union (EU) must quickly reach an agreement on the European budget for the next seven years in order not to harm the economy of the Member States and avoid an institutional crisis, Lusa News Agency reported.

Costa made the remarks on the sideline of the third summit of "Friends of Cohesion" on Saturday, which was held in Beja, Azores, the Atlantic archipelago of Portugal, and attended by 17 EU member states, Xinhua news agency reported.

Quoted by Lusa, the prime minister said that "it is important" that an agreement on the EU's Multiannual Financial Framework (2021-2027) be reached "as soon as possible".

"It would be a bad sign for the European economy if there were doubts about the continuity of the flow of investment financing, the realization of which is very important, especially when it is intended to take seriously challenges such as climate change, the digital transition and the improvement of employment quality. It is essential that there is a quick agreement," he stressed.

He argued that there must be a "spirit of compromise" concerning the European Budget.

"We have to make an effort to approximate the proposal of the European Commission and the proposal of the European Parliament, so that we can find an institutional agreement. Times in Europe are not for institutional conflicts or for divisions, they are for cohesion," he stressed.

Costa added that cohesion policy "benefits all member states of the European Union and, therefore, concerns everyone".

The prime minister pointed out that the EU needs unity, especially after the UK has left.

"This summit takes place on a very special day, the first on which the European Union is on 27th. In this moment of division, it is important for us to send a message of cohesion," he said.