The eurozone crisis should not stop EU countries from co-ordinating their foreign policies, Herman van Rompuy told an audience in London today.
But the President of European Council warned the EU was "weakened" by the crisis, adding the West was now in "relative decline".
Europe cannot expect to turn in to a superpower but neither is was it a "disengaged spectator", he told the international affairs policy institute Chatham House.
Mr van Rompuy said: "For reasons I will explain, worries voiced by some experts that Europe's foreign policy is falling victim to the public debt crisis seem to me an exaggeration, but we have been weakened by the crisis.
"It is also a matter of disproportionate expectations. We cannot expect Europe to suddenly turn into a new superpower. I am an expert at avoiding this trap.
"I built my career on lowering expectations, yet we should not fall into the opposite trap - Europe is not becoming a disengaged spectator."
He added: "European foreign policy is a daily reality for the 27 member states. The financial and economic crisis, deep as it is, does not stop that.
"Yet overcoming the crisis is an absolute pre-requisite for much else. Restoring the eurozone's stability is indispensable for us to punch our full weight at the global stage.
"I am convinced that, for that, we also have to structurally increase our economic growth. Even if it is perfectly normal that mature economies grow more slowly than emerging ones, a potential growth of 1.5% is simply too low. We must focus therefore internally as much on growth as on stability."
In the face of competition from the likes of China and India, it was now even more important for Europe to work together "as a club", he said.
Speaking to an audience of 200, Mr van Rompuy added: "The European Union offers added value, in terms of effectiveness, cost, and legitimacy.
"The union is not about giving up your own role. No, it is about leveraging our strength by aligning our positions, pooling resources, acting in the world as a club and increasingly as a team.
"Even if, for not having its own army, the European Union is seen as using mainly soft means, we achieve pretty hard goals."
And he said it was easy for countries to find common ground when it came to acting in some of the most "dangerous hotspots".
He said he was meeting Russian president Vladimir Putin on Monday to discuss the "unacceptable violence" in Syria.
Mr van Rompuy added: "The fact is that today, in the most dangerous hotspots, such as Syria, Iran or the Israeli-Palestine conflict, the 27 (member states) very easily find common positions, sometimes within hours.
"We work together in climate conferences, on development aid, in crisis missions all over the world from Afghanistan to Somalia. We must do better with less."