European Commission President Jose Manuel Barroso says European leaders must find a new political consensus if the EU is to avoid "paralysis".
Barroso said presidency of the EU would test the UK's pragmatism
He was responding to a speech to MEPS by UK leader Tony Blair, whose country is takes on the EU presidency in July.
Mr Blair warned the EU faced "a crisis in political leadership". An EU summit collapsed last week over its budget.
The UK is refusing to give up its $5.4m (£3bn) annual refund from the EU budget without reforms to farm subsidies.
The EU was facing a "decisive moment", Mr Barroso said.
The European Commission president said last week's acrimonious summit showed the need for leaders to reach a new consensus and " avoid all ideological confrontations and paralysis".
Such a move was necessary if the EU is to deliver on its programme of prosperity, solidarity and security" and to avoid getting lost in a period of introspection, he said.
"We must be a generous Europe, a Europe of solidarity, a Europe of values as well as markets," he said.
"The Europe we want is a Europe where we have economic integration and political integration... I hope the UK presidency will give an important contribution to a political Europe and a dynamic Europe."
German MEP Hans-Gert Poettering, chairman of the centre-right European People's Party group, said the renewed debate about Europe's future was "a victory for the people", but EU leaders must "ensure we take the people with us".
He welcomed Mr Blair's statement that his model for Europe was both political and economic, rather than just as a free-trade zone.
"We want a strong European Union, which is democratic, which is able to act so that we can represent our own interests around the world," he said.
Martin Schultz, leader of the Socialist group in parliament and also a German MEP, said Mr Blair needed to push forward reforms to increase flexibility and promote economic growth.
The EU could not longer "pretend it is only about agriculture" and needed to invest in research and development if it wants to compete with India and China, he added.
He said Mr Blair would have his support if the Prime Minister called for reform of the EU's decision-making process, saying the Council of Ministers should have their debates out in the open.
British MEP Graham Watson, of the Liberal Democrats, repeated Mr Schultz's call for greater transparency.
He said he would back Mr Blair leadership of the EU, but that the union was a "craft lacking direction wallowing in heavy seas" and Mr Blair needed to show he would help build consensus.