At his annual foreign policy speech, the pontiff urged European nations to remember the common values Europe was meant to share when the Treaty of Rome was signed 60 years ago.
He said: "This requires recovering its roots in order to shape its future.
"In response to currents of divisiveness, it is all the more urgent to update 'the idea of Europe' so as to give birth to a new humanism based on the capacity to integrate, dialogue and generate that which made the Old Continent great," he added.
The Pope praised some European nations for giving refugees a "dignified welcome" and acceptance which can help to prevent religious fundamentalism.
Pope Francis went on to condemn violence committed in the name of God as "homicidal madness" and urged religious leaders to teach a message of peace.
He concluded that governments must not only protect their own citizens but "ensure that conditions do not exist that can serve as fertile terrain for the spread of forms of fundamentalism."