Germany and Sweden issued a joint document urging their partners to identify tasks that could be shared -- from air transport to training facilities -- to ensure that Europe maintains its "ability to act credibly in crises."

The two countries called on fellow defence ministries to review their military capabilities in order to establish by early next year areas of potential cooperation.

France and Britain set an example last month by sweeping aside their historic rivalry and striking a landmark deal to share the use of aircraft carriers and nuclear testing facilities.

Nick Witney, a former chief executive of the European Defence Agency, said the German-Swedish paper was a "welcome sign of life, but how determined are they to push through with that?"

He added: "It is only frankly inertia that prevents these from being rationalised across national banners."

The EDA has identified 70 areas where governments could work together, including air transport, medical support and the protection of troops against improvised explosive devices.

But the agency's own tiny budget is the subject of heated debate. The EU has requested a 3.9 percent increase to 31.7 million euros, but Britain insists on a freeze.

British Defence Secretary Liam Fox wrote a letter to Brussels last month saying that a freeze of the agency's budget was "desirable and right" when London has to cut its own defence spending.

The German-Swedish paper said European governments should decide which capabilities will remain strictly sovereign, noting that combat forces, fighter planes, warships, and intelligence could fit in that category.

Areas that could be pooled together include training forces, strategic airlifts and logistics capabilities, the document says.

Finally, governments should identify tasks that they could share such as aerial and maritime surveillance as well as training and exercises, it says.

The EU defence chiefs also discussed their bid to forge more meaningful ties with the NATO military alliance, a goal that has been stuck over age-old divisions between NATO member Turkey and EU state Cyprus.

NATO Secretary General Anders Fogh Rasmussen called on EU defence ministers to conclude an arrangement between Turkey and the EDA, and in return Ankara would have to recognise that all EU members participate in EU-NATO cooperation.

"We all know that the basic problem still exists, namely the division of Cyprus and the dispute connected to that," Rasmussen told reporters after the meeting.

The eastern Mediterranean island of Cyprus has been divided into a Turkish north and Greek south since 1974 when Turkey invaded and occupied the island's northern third in response to a Greek Cypriot coup.

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