Two of Nato's most respected retired generals will issue today a stinging indictment of European military capabilities, arguing that unless the continent pools its defence resources it may be unable to meet mounting security risks, which includeinternational terrorism.
Retired General Joseph Ralston, the American officer who headed Nato until 2003, and retired General Klaus Naumann, Germany's former chief of defence and head of Nato's military committee, argue that European leaders have "lacked the political will" to improve military capabilities.
"Failure to meaningfully improve Europe's collective defence capabilities in the coming years would have profoundly negative impacts on the ability of European countries to protect their interests, the viability of Nato as an alliance, and the ability of European countries to partner in any meaningful way with the US," according to the report, a copy of which was obtained by the Financial Times.
The 97-page study, which is due to be presented today at a gathering of European Union and Nato leaders in Brussels, was a year in the making, involving consultation with former defence chiefs of almost all European powers, including the UK and France.
The two generals and their staffs plan to brief European defence officials over the next two weeks and present their findings in Washington next month, in an effort to provoke action by Europe's politicians, who have failed to deliver on past promises to Nato.
The call for greater integration in European military research and procurement is likely to be controversial, since France and Britain in particular have been at odds over the extent to which a pan-European defence agency should have a say over national budget priorities. Britain has resisted French calls for more centralised procurement.
But the report argues that without a more co-ordinated approach, flat or declining defence spending by most European countries will make it impossible for their militaries to execute their stated security strategies, which include combating terrorism and the proliferation of unconventional weapons, and dealing with failing states. "Some question whether further defence integration can occur among European nations which value their sovereignty and see the world from diverse perspectives," the report finds.
"Although this will be no small challenge, there really is no viable alternative. Staying the course is not an option - indeed, it is a recipe for disaster."
Specifically, the report calls on European powers to reallocate their defence spending so that 25 per cent of budgets is spent on research and acquiring new weapons, while no more than 40 per cent is spent on personnel. Despite past commitments by European leaders to modernise, following the end of the cold war, most of the continent's militaries are still large, troop-heavy forces that find it difficult to respond quickly to crises, be they conflicts or humanitarian disasters.
For smaller militaries unable to provide a wide range of capabilities, the report calls for increased specialisation that can make "high-value contributions to collective security".
The report says such shifts in budget and specialisation should be done in close co-ordination with Nato and the EU's new defence agency so that critical shortfalls - which include a scarcity of transport aircraft, sophisticated command and control systems, and special operations forces - are met and duplication is limited.


