"We want to increase defence investment, and we want to enhance civilian and military capabilities and operational readiness," Michel told the press after a leaders' videoconference on Friday.
The EU has been trying to coordinate more closely on security matters in recent years, for example with plans to jointly fund defence development projects.
The overarching aim is greater strategic autonomy, allowing Europe to project its interests and values on a world stage where the United States seems to be pulling back as China and Russia grow more assertive.
The 27 countries have therefore been working on a new "strategic compass" identifying threats and ways of handling these. The idea is that this common playbook should help the EU to act in concert during crises.
Michel said this document should be finished by March 2022.
NATO Secretary General Jens Stoltenberg also joined the videoconference for a discussion on cooperation between the bloc and the defence alliance.
"The EU efforts are going hand in hand with the military efforts across the continent," he said before heading into the talks.
"For NATO, the main task during this pandemic has been to make sure that a health crisis doesn't turn into a security crisis," he said, "because the threats we [were] faced with before the pandemic, they are still there: Russia's aggressive actions; more brutal forms of terrorism; sophisticated cyberattacks; the rise of China; and the security implications of climate change."
German Chancellor Angela Merkel said closer cooperation between the EU and NATO could also promote cooperation between the EU and the United States in the bloc's framework of the Permanent Structured Cooperation (PESCO), according to her spokesperson, Steffen Seibert.
During the video call, Merkel said she was in favour of strengthening trans-Atlantic cooperation while strengthening European defence capabilities, as they could complement each other, according to Seibert.
EU leaders also discussed how to increase their resilience to cyberattacks and hybrid threats, and debated relations with their southern neighbours.
