With little cash to spare for their armed forces, Europeans must deepen military cooperation after incessant US pressure urging old allies to start pulling their own weight.

A parade of world defence leaders and experts meeting at the Munich Security Conference issued stark warnings about Europe's place in the global arena if it fails to maintain its military might.

With the debt crisis forcing governments to cut spending, Europeans were told they have little choice but to look to each other to ensure they have the aircraft, ships and weapons they need to stay relevant.

"I m not concerned. I'm not pessimistic, on the contrary I see opportunities in this financial crisis to strengthen mechanisms that band allies together," said NATO Secretary General Anders Fogh Rasmussen.

Europeans are slowly moving towards more cooperation.

Rasmussen launched the "Smart Defence" initiative a year ago in Munich, aiming to find ways for the 28-nation alliance to deepen cooperation to maintain military capabilities.

The European Union is promoting a similar "pooling and sharing" initiative to find ways to share resources or buy expensive equipment together.

"Nations realise that going alone, especially for large projects, is not possible," said French General Stephane Abrial, NATO's Supreme Allied Commander for Transformation tasked with finding new ways to cooperate.

But Abrial admitted in a panel discussion on Smart Defence that the alliance will only present "modest" programmes at a NATO summit in Chicago in May.

"I'm a little bit sceptical," said Thomas Enders, chief executive of European aerospace giant Airbus. "20 years ago these ideas were on the table. So why would this time be different."

With the United States cutting its own massive defence budget, withdrawing troops from Europe and turning its strategic gaze towards Asia, Europe can no longer rely on its big-spending ally to fill the gap.

Only a handful of NATO nations respect the alliance goal of spending at least 2.0 percent of GDP on defence, while the US military budget represents 75 percent of the alliance's spending.

"This concept of Smart Defence is welcome news for most American politicians," said Republican US Senator Lindsey Graham.

"It shows that the NATO nations are really seriously thinking about maintaining a robust defence. But if it translates to a nice sounding phrase to justify less spending, I think that's not very smart."

US Defence Secretary Leon Panetta, who came to Munich with US Secretary of State Hillary Clinton to reassure Europeans that Washington was committed to Europe, urged allies to "cast a similar vote of confidence" by continuing to invest in defence.

British Defence Secretary Philip Hammond noted that the two US secretaries sent "a clear message to us in Europe that we are going to have to do more."

But a deep attachment to national sovereignty and wrangling over financing programmes have slowed progress.

NATO allies agreed on Friday to acquire five drones as part of a surveillance programme, but it took two decades after they sorted out disagreements about how to fund the project.

"We have to step cautiously because there are anxieties and concerns about sovereignty, about freedom of operation, which need to be addressed, and they can only be addressed through building trust," Hammond said.

He called for small, "less controversial" steps like joint training before moving on to pooling and sharing resources.

Britain, which is deeply attached to its traditional alliance with the United States within NATO, has also resisted efforts championed by France, Germany and Poland to deepen military integration through the European Union.

"The EU in the past was so willing to declare its ambitions in security policy," said Polish President Bronislaw Komorowski. "I believe that today the EU must move on from declarations, from words to deeds."