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Yves Logghe, Associated Press
British Prime Minister David Cameron, second left, walks towards a meeting room during an EU summit at the European Council building in Brussels, Thursday, Dec. 18, 2014. European Union leaders meet with the top agenda item an ambitious plan to use EU seed money and loan guarantees to jumpstart investment and revive the EU's growth and job creation rates.

BRUSSELS — European Union leaders agreed Thursday to create a strategic investment fund that could generate up to 315 billion euros ($386 billion) in private- and public-sector money to upgrade infrastructure, jumpstart the EU's sluggish economies and ignite job growth.

"The economic situation has improved ... but we are not safe yet," said EU President Donald Tusk. "Today, we need more investment, more structural reforms and sound public finances across Europe."

The plan approved by leaders of the 28-nation EU at their one-day summit meeting in Brussels calls for the new European Fund for Strategic Investments to be in operation and approving new investment projects by mid-2015.

The plan, which calls for use of EU seed money to leverage up to 15 times more in private funds, is the brainchild of European Commission President Jean-Claude Juncker. Critics have already warned that despite its multibillion euro price tag, it may not be big enough to win over wary investors.

"This package looks like creative accounting for the moment," Lithuanian President Dalia Grybauskaite said as she arrived for the summit.

Grybauskaite and the other EU leaders seemed to acknowledge the possibility that private companies may be reluctant to risk their capital by noting in a summit communique that the strategic fund will accept contributions from EU member states. For the fund to launch, it would also require approval for European legislators.

European Parliament President Martin Schulz, in a speech prepared for delivery at the summit, said the EU must stimulate and modernize its economy, or risk falling farther behind global competitors like the U.S. and China.

Schulz said investment in areas like schools, universities, green energy and infrastructure was key "if we want Europe to be an economic champion in the future."

German Chancellor Angela Merkel said investments fostered by the strategic fund "must go into projects for the future — particularly, for example, in the digital economy or where we aren't so good on the world market as we should be: electromobility (electric cars) and the like."

Over dinner, Tusk said, the leaders were scheduled to discuss another major challenge: long-term policy toward Russia.

To resolve the Ukraine crisis, Tusk said EU members must agree on a strategy that is "tough and responsible" for dealing with Russia and its president, Vladimir Putin.

EU foreign policy chief Federica Mogherini said she would brief the summit on talks held with Ukrainian officials this week. She said she derived no satisfaction from the economic woes of Russia, the target of EU and U.S. sanctions since the Kremlin annexed the Crimean Peninsula.

But Mogherini said Putin and other senior Russian officials "should reflect seriously about the need for introducing a radical change in the attitude toward the rest of the world and to switch to a cooperative mode."

The EU's last high-level meeting of the year was the first chaired by Tusk, a former Polish prime minister. Before it began, he confided to reporters that though he was an experienced politician, he was feeling "something like stage fright."

Angela Charlton in Paris and Geir Moulson in Berlin contributed to this report.