ROME (BLOOMBERG) - Italy's Prime Minister Mario Draghi called for a swift rethink of European Union mechanisms to allow the bloc to face the unprecedented challenges linked to Russia's invasion of Ukraine and soaring energy prices.

"The institutions set up by our predecessors in previous decades have served well European citizens, but are inadequate to the current reality we are now facing," Draghi said in an address to the European Parliament in Strasbourg on Tuesday (May 3).

He dubbed his vision for a new EU a form of "pragmatic federalism" that would include joint decision-making for sectors including the economy, energy, defence and foreign policy.

"If this will require starting a process to change EU treaties, we should embrace it," Draghi said.

Italy, one of the founding members of the union, would support the accession process of new countries including Albania, North Macedonia and Ukraine into the bloc. Crises facing the bloc "require an acceleration in the European integration process" Draghi said, calling for coordinated defence and foreign policy decisions.

France, which currently holds the EU's rotating presidency, has made bolstering the EU's defence coordination a top priority this year.

Unity challenge

The bloc's unity has faced its strongest challenge since Russia's invasion of Ukraine with Vladimir Putin's demand to buy gas in roubles and an EU push to ban Russian oil, with member states splintering over how to proceed.

Hungary has indicated it would be ready to veto oil sanctions if the measures restricted its ability to import energy too much, while Poland, whose gas supplies were cut by Russia last week, wants to move faster.

On Monday, Draghi called for more clarity from the European Commission on whether completing payments in roubles would be a violation of sanctions. He reiterated that Italy will follow the EU guidance on the matter.

The EU's energy commissioner, Kadri Simson, said on Monday that the bloc would issues clarifying guidance in the coming days.