Meanwhile Mr Macron and German chancellor Angela Merkel were insistent that the EU's focus must be on building a future for the remaining 27 states, and not on the Brexit negotiations, which were not on the agenda at the Brussels summit.
While the bloc has 15 military and training missions overseas, it does not match its economic might with the same military reach.Leaders in Brussels gave their governments three months to say whether they would be willing to join a coalition of European Union members to launch missions in the future and under what terms."We have set ourselves an ambitious timeline".
At the summit May is due to unveil a "generous offer" to resolve EU concerns about the rights of three million European expats living in Britain after Brexit.
But the proposals are likely to meet resistance in Brussels, which has already published its own formal proposals which would guarantee the rights enjoyed under EU law to any European expat resident in the United Kingdom on the date of Brexit.
"I told them that in fact the European Union was built on dreams that seemed impossible to achieve, so who knows?" the former Polish premier said.
"That's been an important issue, we've wanted it to be one of the early issues that was considered in the negotiations, that is now the case, that work is starting.
We must consider the historic nature of this", Macron told a news conference during an EU summit.Modest by U.S. standards, the measures could nevertheless revitalise Europe's inefficient defence industry, allow the EU to send more peacekeepers to flashpoints and send a message to U.S. President-elect Donald Trump that the bloc wants to pay for its own security.Although the leaders' statement did not detail the size of the defence fund, the European Commission has said it would put forward at least 1.5 billion euros ($1.69 billion) a year from the bloc's budget for the research and purchase of assets.
"This is a real added value, because it allows us to conduct missions. we will see who joins this structure", she said, giving Africa as a place for more European Union operations.
A European diplomat said that there was "no question of any discussion, let alone any negotiation" with May at the summit.
For the president of Lithuania, which has more than 100,000 citizens living in Britain, keeping close ties after Brexit is vital.
His Belgian neighbour Charles Michel, who has long voiced concern that British ambivalence should not be allowed to derail much deeper European integration, was more cautious about even raising the prospect of Britain staying in the Union.
The other 27 European Union states will also hear a report from chief negotiator Michel Barnier on his talks with David Davis earlier this week.
Mr Tusk spoke of his "dream" that there could still be a U-turn on the Brexit decision before the expected date of withdrawal in March 2019.
Michel wrote in a Twitter message: "It's time for action and certainty".
"You may say I am a dreamer, but I am not the only one".
Calling Brexit "a pity", Lithuania's outspoken President Dalia Grybauskaite said: "We need to think about the future, and the sooner we settle the future the better for all of us".
One year on Britain is in a state of turmoil, while the EU27 has a new found confidence. The leaders are not expected to raise any objections to prolong a number of sanctions against Moscow for destabilizing Ukraine.