Ukraine crisis highlights NATO defense spending problem: Hagel

By David Alexander WASHINGTON (Reuters) - Russia's actions in Ukraine have shattered the myth of European security in the post-Cold War era and underscored the danger NATO allies have created by failing to meet their defense spending pledges, U.S. Defense Secretary Chuck Hagel said on Friday. The Pentagon chief, in a speech on the future of the 28-nation alliance, said Russia's seizure of the Crimean peninsula and other action in the region had "reminded NATO of its founding purpose" and "presented a clarifying moment for the transatlantic alliance." He also raised a longstanding U.S. concern about NATO defense spending, noting that American outlays on security are three times that of the other 27 partners combined, even though the U.S. gross domestic product is smaller than their total GDP. "This lopsided burden threatens NATO's integrity, cohesion and capability - and ultimately, both European and transatlantic security," Hagel said in remarks at the Woodrow Wilson International Center in Washington. "We must see renewed financial commitments from all NATO members." Only four of the NATO partners met their agreed target of spending 2 percent of GDP on defense in 2013 - Estonia, Greece, Britain and the United States. France and Turkey fell just shy of the 2 percent goal. Hagel said one of the biggest obstacles to investment in defense was the sense that the prospect of conflict among nations had dissipated with the end of the Cold War. "Russia's actions in Ukraine shatter that myth and usher in bracing new realities," he said. Given Moscow's actions in Ukraine, NATO in the future "should expect Russia to test our alliance's purpose, stamina and commitment," he added. "We cannot take for granted, even in Europe, that peace is underwritten by the credible deterrent of military power," the U.S. defense chief said, calling for greater coordination among the allies on defense investments as well as higher levels of spending. Hagel's comments came amid increased violence between Ukrainian loyalists and Russian separatists despite an international peace deal, and echoed calls by other top U.S. officials this week for NATO members to shore up their commitments. On Friday, pro-Russian rebels shot down two Ukrainian helicopters, killing two people, as Ukrainian forces tightened their siege of separatist-held Slaviansk. U.S. Secretary of State John Kerry on Tuesday urged NATO allies who are not meeting the 2 percent defense spending benchmark to boost their payments to the alliance in the next five years. To help meet the goal of increasing defense spending, Hagel called for NATO members' finance ministers or budget officials to attend an alliance meeting to discuss the issue. Spending imbalances among the NATO partners has been a longstanding complaint of U.S. defense secretaries. Three years ago, then-Defense Secretary Robert Gates used his final speech in Europe as Pentagon chief to deliver a parting shot at the allies, saying the NATO members risked "collective military irrelevance" unless they bore more of the burden and boosted military spending. His remarks came in the context of the Western-backed 2011 ouster of Libyan dictator Muammar Gaddafi's government, which exposed a number of weaknesses among the European partners' militaries, such as a lack of intelligence and reconnaissance aircraft and specialists needed to identify bombing targets. (Reporting by David Alexander and Susan Heavey; Editing by Bill Trott and Paul Simao)