European Union nations and legislators have reached a deal in principle to create a fund that could generate up to 315 billion euros ($345 billion) in private- and public-sector investment to upgrade infrastructure, stimulate the EU's sluggish economies and ignite job growth.

After all-night negotiations that ended early Thursday, both sides reached the deal, which aims to use 21 billion euros ($23 billion) from EU institutions as seed money to attract funds from private investors.

EU Vice President Jyrki Katainen said he hoped the plan would be fully approved by both the 28 member states and the European Parliament in June.

"What's most important is to start boosting investment, jobs and growth," Katainen said.

The investment plan is named after Commission President Jean-Claude Juncker who first proposed it in November. He has said the plan would create up to 1.3 million jobs to help alleviate unemployment, which has been hovering around record rates in the EU since the financial crisis.

In its latest forecast, the EU says unemployment in the EU and in the eurozone is expected to fall this year to 9.6 percent and 11.0 percent, respectively, and further improve next year.

Juncker says the funds are necessary to lure back investors who are still reluctant to commit to projects in the wake of the financial crisis.

Investment in the EU last year was down some 430 billion euros ($470 billion) compared with 2007, before the financial crisis exploded. While investment is back on the rise in the United States, Europe is still lagging behind.

The Juncker plan is to be made up of 5 billion euros from the European Investment Bank and 16 billion euros in a guarantee fund, half of which comes from the EU budget.