U.S. presses allies to raise defense spending after Ukraine

By Adrian Croft and David Brunnstrom BRUSSELS (Reuters) - U.S. Defense Secretary Chuck Hagel urged NATO allies on Tuesday to raise their defense budgets in response to the Ukraine crisis, saying a slide in military spending could pose as much of a threat to the future of the alliance as any enemy. He also called on allies to look at how their militaries were trained, equipped and structured to meet new security challenges, saying NATO should expect Russia to continue to test its resolve, even though it was withdrawing its troops from the Ukraine border. "We cannot shrink from this challenge ... We must reaffirm the security guarantees that lie at the heart of this alliance. And we must hold fast to those guarantees by summoning the will to invest in a revitalized NATO," Hagel said, according to the text of a speech to NATO defense ministers meeting in Brussels. The 28-member alliance is studying what longer-term steps it needs to take to bolster its eastern defenses and improve its ability to respond to the unorthodox tactics used by Russia during its annexation of Ukraine's Crimea region. As the NATO meeting began, the White House unveiled plans for a $1 billion initiative to send more of its military to Europe on a temporary basis but stopped short of promising to beef up its permanent presence as some of Washington's allies are seeking. It said the United States would review its force presence on the continent. The U.S. plans include greater U.S. participation in training and exercises, deploying U.S. military planners, and more persistent naval deployments in the Black Sea and Baltic Sea, on Russia's doorstep. Hagel urged NATO to "come to grips with the potentially dire consequences of current trends in reduced defense investment – consequences that, in the long term, pose as much of a threat to the alliance as any potential adversary. Allies must demonstrate leadership and resolve, and reverse these trends." He said a confidential assessment of the state of NATO's military capabilities, presented to ministers at the meeting, was "a sobering dose of reality." DEFENSE CUTS Many NATO allies have slashed defense spending in response to the financial crisis. Only a handful meet NATO's target of spending 2 percent of their economic output on defense. Latvia, Lithuania, and Romania have announced plans to increase defense spending in response to the Ukraine crisis. Polish President Bronislaw Komorowski said on Tuesday he would ask the government to increase defense spending to 2 percent of Gross Domestic Product from 1.95 percent now. In the three months since the Ukraine crisis erupted, the U.S.-dominated alliance has sent fighter planes and ships to the region and stepped up military exercises to reassure eastern European allies alarmed by Russia's actions, while making clear it has no intention of intervening militarily in Ukraine. Ministers agreed to develop a "readiness action plan" for the NATO summit in Wales in September that will contain longer term measures for beefing up eastern European security. Military planners still have to come up with detailed proposals, but they could include pre-positioning equipment in eastern Europe and preparing infrastructure to enable rapid reinforcement, more military exercises and shortening the response time of NATO's rapid reaction force. Ministers from Germany, Denmark and Poland informed their NATO counterparts that they had agreed to work on upgrading the readiness of a NATO headquarters in Poland, that of the Multinational Corps Northeast in Szczecin, a NATO official said. The headquarters is likely to get more staff and equipment so it could take command of exercises and, potentially, any reinforcement effort needed in eastern Europe. Poland wants NATO to go further and permanently base troops on its soil, but many allies are hesitant, questioning the cost, the military necessity and the wisdom of antagonizing Russia. Russia says permanent basing of troops in Eastern Europe would violate a 1997 agreement with NATO. Many NATO diplomats say the agreement is vague enough to allow them to reinforce Eastern European countries. (Reporting by Adrian Croft, David Brunnstrom and Justyna Pawlak; Editing by Peter Graff)