European Union leaders met today to seek solutions to two major challenges - how to jump-start sluggish economic growth at home and how to deal long-term with Russia.

On the economic front, European Council President Donald Tusk, the official host of the 28-nation summit, said he expected attendees to call for the urgent establishment of a strategic investment fund.

The fund is supposed to leverage EU seed money and loan guarantees into up to €315 billion of private-sector investment to upgrade infrastructure, create jobs and stimulate growth.

The plan is that of European Commission President Jean-Claude Juncker.

Critics have already warned that it may not be big enough to encourage wary investors, whose confidence is crucial for success.

"This is not an issue of putting public money into something. It is an issue of attracting private investment," Finnish Prime Minister Alexander Stubb said.

For each euro of EU funds allocated, Mr Stubb noted, the plan's authors "hope to get a leverage which is 15 times" greater.

Over dinner in Brussels, Belgium, Mr Tusk said, the leaders will discuss long-term policy toward Russia.

To resolve the Ukraine crisis, he 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 US sanctions since the Kremlin annexed the Crimean Peninsula.

But Ms Mogherini said Mr 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 co-operative mode."

Prime Minister Joseph Muscat is attending the summit.