By Keith Weir
LONDON (Reuters) - The United States and European countries should do more to open up their defense markets to competition at a time of tight budgets, the head of NATO said on Monday.
NATO Secretary General Anders Fogh Rasmussen also said he planned to appoint a special envoy to help ensure that countries were getting value for money for defense spending.
"We need equal opportunities for European Union and American defense companies to compete across the Atlantic," Rasmussen told an industry conference in London.
He noted that 90 percent of the Pentagon's procurement budget went to U.S. companies, while Europe often favored its own contractors.
Rasmussen welcomed moves by President Barack Obama to reform export licensing programs which should allow U.S. companies to play a greater role in Europe.
NATO's 28 allies needed to prioritize spending, improve coordination and adopt a multinational approach, he said.
Rasmussen said he wanted a specific package of multilateral measures to be on the table in time for the next NATO summit in Chicago in May 2012.
NATO is worried that financial hardship among member countries could hurt the alliance's military capability unless steps are taken to make procurement more efficient.
"I think for most of us, it is the worst economic crisis we have ever faced and it has an impact on everything we do," Rasmussen told reporters. "Of course, NATO defense budgets are falling, the cost of defense capabilities is rising and security threats are more complex and less predictable."
"We can't ask the allies to spend more, we have to ask them to spend better."
The Pentagon is shaving at least $350 billion from its previously projected spending over the next decade. European allies are also making deep defense cuts.
Rasmussen repeated his criticism of the shortcomings of the NATO operation in Libya, citing lack of intelligence and transport capabilities of an operation led by its European members and Canada.
U.S. officials have said the Libyan operation showed the need for European allies to spend more on defense.
(Reporting by Keith Weir; Editing by Peter Graff)