The EU has a war chest of £310 billion to spend by 2020 on its so-called cohesion policy as it tries to reduce inequality across the union.
European Commissioner for regional policy Corina Cretu says that the money is crucial to stop the segregation of migrants in harsh and dangerous ghettos.
Despite decades of spending on infrastructure in the poorer parts of Europe, the European Union is aiming to reduce inequality by pumping more money into countries in eastern and southern Europe.
Ms Cretu said that this is important for 'social integration'.
She told the Thomson Reuters Foundation this week at the World Urban Forum in Kuala Lumpur, Malaysia: 'Social integration will be crucial in the years to come.
'If we allow ghettos or segregation of migrants, this will become a nuclear bomb in the future.'
The EU asylum system was on the brink of collapse in 2015 as a million refugees and migrants arrived by boat, overwhelming Greece and Italy.
Poland, Hungary, Slovakia and the Czech Republic refused to take some of the new arrivals.
The dispute ended up in the courts and has weakened the bloc's unity, spilling over to other policy areas.
European Union interior ministers are now struggling with the politically charged issue of reforming the union's asylum system. Read More