Leaders also urged EU ambassadors to arrange for the rapid delivery of a promised USD 3.25 billion in aid for refugees in Turkey in return for its help in stemming the flow.
Following a slew of emergency summits this year, they acknowledged they had been too slow to carry out a joint strategy to tackle Europe's worst refugee crisis since World War II.
"Implementation is insufficient and has to be speeded up," the leaders declared yesterday in the conclusions on migration at their last summit of the year in Brussels.
The new agency will have a quick reaction force of 1,500 guards and a "right to intervene" in European Union nations that are either overwhelmed or are deemed to be failing to secure their part of the EU's external border.
With one million mainly Syrian refugees and migrants set to arrive in Europe this year, the lack of effective border control has led to fears for Europe's cherished Schengen passport-free area as nations restore internal controls to stem the tide of humanity.
Taking over from Luxembourg, the Netherlands assumes the rotating presidency of the European Union from January 1 until June 30 next year.
An EU source acknowledged that some member states remain reluctant to embrace a plan that could see them cede sovereignty to bureaucrats in Brussels.
European Commission Vice President Frans Timmermans said this week the new force could take over management of national borders in "exceptional situations" where a member state was unable to cope.
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