The European Union must reshape its relationship with North Africa, targeting help toward countries that improve the rule of law and making more resources available to the region, European Commission President Jose Manuel Barroso said Wednesday.

In a press briefing Wednesday, Barroso also said the EU was increasing to EUR10 million the aid it was providing to help handle the refugee crisis in Libya .

The EU will also mobilize extra funds to help member countries, like Italy , maintain border control, he said. That will take total spending on this to EUR25 million.

Barroso said there are 140,000 refugees from Libya , many of them Egyptians who had crossed into Tunisia . He said the situation was a "humanitarian tragedy" with some of the people fleeing Libya lacking any identity papers.

The EU is providing medical and food aid to refugees at Libya 's borders with Egypt and Tunisia .

Barroso said the commission isn't involved in discussions of a no-fly zone but that the EU must do everything possible to ensure that Col. Moammar Gadhafi's regime steps down. Calling Gadhafi "part of the problem," Barroso said "it is time for him to go and give the country back to the people of Libya ."

More broadly, Barroso said the EU needed to reshape its role in the region to support democracy.

Many EU member states were caught by surprise by the recent events, which started with large-scale protests in Tunisia . Ties between French ministers and the Tunisian regime of former President Zine El Abidine Ben Ali embarrassed President Nicolas Sarkozy's administration while officials from Italy , which has close links with Libya , have warned the EU against taking action against Gadhafi's regime.

This week, however, the EU imposed an asset freeze and travel bans against Gadhafi and 25 other Libyan officials.

Barroso said the EU still has EUR4 billion to spend by 2013 on the region as part of its Neighborhood assistance program.

He said there should be stronger conditionality on the funds to reward those who improve the rule of law and said money should be funneled to help constitutional and judicial reforms and to support non-state actors like unions, women's organizations and the media.

Barroso also said the EU would use European Investment Bank funds to prepare a "stimulus package" for the region, focused around smaller firms.

And he said the Commission supports allowing the European Bank for Reconstruction and Development to invest in the region. That is a decision for member states.

He also said the EU, should work to encourage mobility between the two regions, with targeted visa facilitation for students, researchers and business people.

The Commission president dismissed the idea that the Arab world wasn't fit for democracy, saying people made similar arguments about southern Europe when it democratized in the 1970s.

"They will of course follow their own road, make their own choices. It is not up to us to tell them what to do," Barroso said. "But I want to make one thing very clear here: the EU and the Commission are totally determined to support them on their journey to democracy and a better future."

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