European Union leaders agreed early Friday 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 by 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, the leaders discussed what Tusk termed the other major challenge for Europe: what long-term policy to adopt toward Russia.

"We must go beyond being reactive and defensive," Tusk, a former Polish prime minister, said. He called for a strategy that is "tough and responsible" for dealing with Russia and its president, Vladimir Putin, and resolving the Ukraine crisis.

The policy discussion will resume when EU leaders meet again in March, Tusk told a post-summit news conference. He asked Europeans to "be self-confident and realize our own strength."

EU foreign policy chief Federica Mogherini, also attending the Brussels summit, 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."