Belgian authorities have faced strong criticism at home and abroad for not doing more to prevent the carnage, as links emerged between the Brussels attackers and the jihadists behind the Paris terror assaults in November.
"When there is an attack like that of course that's a failure and nobody can deny this," Michel told reporters in Brussels.
But "I cannot accept the idea that we're a failed state."
A total of 32 people died in the suicide blasts at Brussels airport and a metro station.
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"It took 10 years to stop Bin Laden," Michel countered, referring to former Al-Qaeda chief Osama Bin Laden.
Abdeslam is currently awaiting extradition from Belgium to France and has denied any prior knowledge of the Brussels bombings.
Belgium, a notoriously complex country divided along linguistic and political lines, has been accused of failing to keep better track of suspected extremists, as the Paris attacks were largely planned in Brussels.
"That's where we have a lot of work to do.