In December, the European Council will hold a major summit on the Common Security and Defence Policy in December. Turning to defence and security might seem like light relief for Europe's leaders given the stresses and strains of the Eurozone crisis. Yet, as a number of recent think-tank reports make clear, the challenges facing European defence and security are more than a side-show.

Both issues have their roots in the economic crisis. Europe's austerity budgets have hit defence spending hard. Britain has cut deeply since the 2010 Strategic Defence and Security Review, and the recently published Livre Blanc will make a similar dent on French military spending. In the absence of a Cold War like threat, defence budgets will always be a softer touch than public services. And despite successes in Libya and Mali, failures in Iraq and Afghanistan have done little to build public confidence in the ability of the West to deploy military force to good effect.

In fact, the economic crisis hit defence budgets that bit harder because of longer-term weaknesses. While countries like Britain and France are reluctant to wind in their global aspirations and broad range of military capabilities, their treasuries have not provided the funding to match. Meanwhile, the rising cost of those capabilities, often involving complex, cutting-edge procurements, outstrips average inflation rates. In essence, Europe's military capabilities, while still impressive in relative terms, are in decline, and there is no sign of this changing in the foreseeable future.

Not a problem, perhaps, if geo-political trends were all benign. A report by the Paris-based EU Institute for Security Studies makes for sober reading. It claims there are three trends that should be keeping Europe's leaders awake at night. Firstly, globalisation continues to make the world a smaller place. Europe cannot and will not be able to hide from the effects of instability, whether in near or faraway places. Secondly, the rise of China and the increasing economic importance of the East, has prompted the US to prioritise its security interests in Asia over those in Europe. Finally, a new revolution in military affairs in the form missile defence technologies, remote-controlled and robotic technologies and directed energy weapons, cyber warfare and laser technologies that seem to bring the science fiction of Star Wars to life.

The EUISS authors, accepting that national defence budgets will be stretched for the foreseeable future, make a strong and nuanced argument for deeper European cooperation. Emphasising that what they are advocating is "not a Euro-military", but a web of cooperative activities to make for more efficient and effective spending, unified as far as possible around a common strategic assessment. Central to their solution is much greater use of pooling and sharing capabilities, not just military equipment, but facilities, training and cooperation on doctrine.