Europe needs to make better use of dwindling defence budgets if it is to properly take care of military problems in its own backyard as the US orients itself towards Asia, the EU commission said Wednesday.

In an ideas paper meant to feed into an EU leaders defence summit in December, the commission noted that Washington is "rebalancing its strategic focus towards Asia" while the recent Libya war highlighted European military "shortfalls."

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"We will not have the weight we need in the world without a common defence policy. To support it, we need to strengthen our defence and security sector," said EU commission president Jose Manuel Barroso.

"We need to be able to back up our positions of principle with security and civilian missions that can help stabilize the situation in crisis areas around the world," he added.

EU states between them have about 1.6 million soldiers and spend €194 billion annually on defence - but this strength is diluted by overlapping capacities and spending at a national level.

Spending is down from €251 billion in 2001, while defence R&D spending declined by 14 percent between 2005 and 2010, to €9bn.

The commission points out that the US spends seven times more on research and development than all 28 member states put together.

Russia and China, for their part, are expected to double their defence spending by 2015 when compared to 2011.

"We want to support the defence industry for economic reasons but also for defence reasons," said industry commissioner Antonio Tajani.

But the commission is almost entirely bound by member states political will in this area, with governments often reluctant to share defence technology or pool resources.

This is exacerbated by a reluctance to let the EU commission muscle in on an area where it has no legal powers.

Meanwhile the EU only has a few serious military powers - predominantly the UK and France - while most of its states also have commitments to Nato. On top of this, some countries, such as Ireland, are neutral.

Much of the commission paper's suggestions reflect this complexity.

They focus on ensuring that defence-related legislation is being properly implemented, that member states are not abusing state aid rules to benefit national defence industries and that defence companies will have better access to EU funding.

A key proposal, says the commission, is standardisation. Its paper notes that most standards are civilian but when military standards are required, "they are developed nationally, hindering co-operation and increasing costs for the industry." Lack of common standarisation means armies cannot easily share equipment.

The commission also says it plans to make armies more energy efficient.

"I don't think this (proposal) is modest. It demonstrates a real will to progress," said Michel Barnier, internal market commissioner, reacting to suggestions that the paper amounts to little more than a repetition of what the commission has been asking of member states in defence for several years.

The paper is due to be discussed by EU leaders at their traditional December summit. The commission will then make a roadmap with "concrete actions and timelines."