From Reuters: China and India sharply raised defence spending in 2009 despite the economic crisis but most European NATO members face a squeeze on defence budgets as they rein in gaping deficits, a report said on Wednesday….

In Europe, though, many countries had seen their budget deficits rise sharply as they pumped money into the economy to try to end the recession…

Among European members of NATO, only Norway and Denmark were likely to increase their defence budgets in 2010, and over the medium term most other countries would do well to increase defence spending in line with inflation or match existing budget levels, it said.

This would lead to pressure to step up pooling and multinational management of defence assets, to countries specialising in niche capabilities and to the collective procurement of critical defence equipment, it said. (photo: AP)