For the past three years, EU member states have been working towards meeting the so-called Helsinki Headline Goal. This has required developing the necessary military capabilities to be able by next year to deploy, within 60 days, a force of up to 60,000 troops for humanitarian and rescue missions, peacekeeping, and tasks of combat forces in crisis management, including peacemaking, and to sustain that force in the field for at least a year. That deadline is looming and there are still many capability shortfalls that have to be addressed to ensure that the European Union's Common Foreign and Security Policy has teeth.

At roughly the same time that EU member states committed themselves to the Headline Goal, NATO members - of whom 11 are also in the European Union - signed up to the Defence Capabilities Initiative (DCI), the Alliance's programme to raise its military capabilities to meet the challenges of the 21st century. The fact that these two high-level programmes have run in parallel has possibly contributed to confusion about their nature among commentators, some of whom have even speculated about competition between the two organisations. In reality, however, the European Union and NATO should be able to work effectively together as partners.

EU-led, crisis-management operations encompass all military missions with the exception of collective defence. This covers support to civilian populations in areas of natural disasters; evacuation of EU citizens from crisis areas; monitoring of cease-fires, of borders, of air and sea-space and embargoes; establishing and maintaining a secure environment; stopping hostile actions; separation of parties by force; and other types of enforcement. With the exception of territories inside the European Union, such missions are possible whenever and wherever politically decided.

Considering this broad range of potential missions, it is clear that the military capabilities required may vary greatly. Many factors have to be examined during the planning of any operation, including the political and military objectives, the threats and risks, and time factors, such as the possible duration. In addition, the geographic location of operations and their specific political, military, logistical and social characteristics have to be taken into consideration. Assessing all these factors requires intelligence capabilities. At present, however, European countries have significant shortfalls in all areas of intelligence collection and there is no common system for intelligence fusion.

Equally, it is impossible to identify appropriate forces, generate, assemble and deploy them, command them, sustain them, react to changes in the situation and eventually to recover them without having effective military headquarters with multinational staffs in place. Moreover, all levels within the chain of command - from Brussels to the individual force element - must be linked with the appropriate information technology.

The drive to develop military capabilities in the European Union is not about building a competitor to NATO but about improving European capabilities in general and, in this way, both strengthening the European pillar of NATO and contributing more effectively to NATO-led operations. The European Union is not seeking to create a standing reaction force, but to be in a position to assemble a force on a case-by-case basis from existing capabilities on the principle of voluntary contributions. And the European Union will not be involved in collective defence, but in crisis-management operations, the so-called Petersberg tasks, where NATO as a whole is not engaged.

To avoid unnecessary duplication there is no intention to create, in addition to existing national and multinational headquarters, new ones for European purposes. Instead, either elements of NATO's integrated command structure, or those headquarters offered by states that have signed up to the Headline Goal, are to be used. In the latter case, headquarters need to be made multinational and prepared for future operations. If this approach is to function properly, considerable groundwork is required. This includes ensuring that headquarters possess up-to-date and appropriate communication systems for processing technical data.

An appropriate mix of force elements throughout the services and branches is necessary to conduct operations successfully. Here, the targets of the Headline Goal have, at least quantitatively, been filled in terms of offers from member states. However, information is still lacking as to the quality of these offers, in particular in relation to the interoperability of force elements to be assembled to ensure effective structure and composition. A reason for this is the mechanical approach of member states to meeting the Headline Goal: defining and listing the required individual force elements, accepting member states' offers at face value and matching requirements and offers individually. Attempts to develop a more sophisticated review process or capability-development mechanism, including a link to NATO's force planning system, have to date come to nothing. It is, nevertheless, clear that many shortfalls still need to be overcome. Moreover, the significance of these shortfalls goes beyond the issue of EU capabilities and may limit the ability of member states to contribute to both NATO-led and other operations.

Some shortfalls could be eliminated relatively easily through additional offers from member states. It is hard to believe, for example, that Europe lacks such force elements as infantry headquarters, armoured companies, general support engineering, headquarter augmentees or military observers. That said, many member states are simultaneously engaged in several missions around the world and may not, therefore, be in a position to make certain force elements available for EU purposes. Indeed, this is the case for all voluntarily generated forces, not just for the Headline Goal.

In other shortfall areas - such as intelligence gathering and reconnaissance systems, helicopters, suppression of enemy air defence, precision-guided ammunition, air-to-air refuelling or strategic transport - numerous national and multinational initiatives and projects already exist. In time, therefore, these capabilities should become available. However, further clarity is still required as to whether such projects are designed primarily to upgrade the capabilities of the countries involved or whether they could also be used in a broader, multinational environment. If the latter is the case, equipment will have to be interoperable with that of other countries.

Finally, there are those shortfall areas where an upgrade of capabilities can only be achieved through considerable investment. This risks overburdening existing budgets and overheating future spending plans, which makes progress in these areas unlikely.

At present, EU and NATO member states are working towards raising their military capabilities via the European Capability Action Plan (ECAP) and the DCI and it is in the interests of both organisations to coordinate these efforts. At a time of tight budgets and competing spending priorities, however, getting maximum output for the defence Euro will be critical to meeting capability targets. Achieving this will require new and innovative thinking and approaches towards security.

Arguably, the most important change required is psychological. Without losing sight of the broader transatlantic or NATO dimension, European decision-makers will have to think and act "European", if they wish to develop and improve European capabilities. In addition to thinking in national terms, decision-makers will have to ask themselves at every stage of force planning - from defining requirements to research, development and procurement - whether a particular force element or piece of equipment is sufficiently flexible to fit into a multinational system; whether it will add to European capabilities or just contribute to an existing surplus of capabilities while other deficits remain; and whether it would be possible to generate efficiency gains by joining forces with another country. Achieving so great a shift in mindset is extremely difficult, not least because the necessary discipline effectively entails self-imposed restrictions on sovereignty as well as a range of consequences for the national defence industry.

Such an approach also obliges countries to consider capabilities in terms of building compatible systems. When certain countries develop and procure intelligence-gathering or reconnaissance systems, they are, indeed, upgrading their own capabilities, but in the absence of the tools to fuse and disseminate the results, the return on the investment is not as great as it could be. Likewise, to maximise efficiency, new attack and support helicopters must be capable of operating together cohesively and being integrated within a wider, multinational force. And to make the most of new transport capabilities, there must be effective coordination, the adoption of common loading measures and standards as well as sufficient loading and unloading capacities.

Achieving the necessary mind shift requires joint and combined force development and planning at the European Union as well as at NATO, and, equally important, coherent approaches between the two organisations with full support from capitals. Moreover, those involved, both now and in the future, should follow common training programmes to encourage them to think and act in multinational, European and transatlantic terms. This is as much the case for officials from the established members of both organisations as it is for their peers from countries that have only recently joined or are about to join. Moreover, common training programmes should not remain restricted to narrow areas, but should be enhanced and expanded to help inculcate common or at least compatible approaches, concepts and procedures in the relevant officials.

In addition to new and, hopefully, more coordinated force development and procurement procedures, European countries must also focus on those collective capability goals, to which they signed up at Helsinki. Here, intelligence is the indispensable tool for effective planning and decision-making.

Handling of intelligence is, of course, an extremely sensitive issue. However, if EU leaders are to have a sound basis for decision-making, if EU military commanders are to have the information they need to plan and run operations and if Europeans want to add value to NATO intelligence, more transparency and cooperation is required. The creation of a European intelligence fusion centre could provide the basis of a solution. Such a centre could take in information from the European Union's Satellite Centre and receive all source intelligence products from member states, compile and disseminate them. It might also receive intelligence requests and, with the benefit of some kind of tasking authority, could assist in the development of a better-coordinated European intelligence gathering and reconnaissance system for strategic and operational purposes.

A second area requiring improvement is command and control. At present, four European countries have put their national headquarters forward as potential operational headquarters for the European Union. In addition, at the secondary command level - that of force headquarters - many more offers have been received. Moreover, Supreme Headquarters Allied Powers Europe and other elements of NATO's command structure provide another option as soon as relations between the European Union and NATO have been resolved. However, with a command structure review under way at NATO, and the imminent enlargement of both the European Union and NATO, decisions might well be delayed.

To avoid unnecessary duplication, the number of existing options might well be reduced and European efforts combined, especially where interoperable and compatible information technology is concerned. This, together with a fresh approach to intelligence, might considerably assist in the development of a common European intelligence, surveillance and reconnaissance (ISR) and command, control, communications and computing (C4) capability for EU purposes and, at the same time, strengthen NATO's European pillar.

Finally, there are also areas where Europe already possesses capabilities, but where a more comprehensive, systematic approach could imbue them with greater impact. The creation of a European Air Transport Coordination Cell under the European Air Group is a good example. Expanding its role to coordinate the full range of strategic deployment and transport, including the use of civilian assets to avoid unnecessary competition, could pave the way for a European deployment coordination centre. Combining the capabilities of several countries in combat search and rescue in a multinational European body would also help address what is at present a glaring deficiency.

Europe clearly has great military potential. Indeed, this has been demonstrated both in the ongoing NATO-led operations in Southeastern Europe and in missions involving EU member states elsewhere in the world. However, European capabilities alone are often not sufficient for the European Union to perform all the tasks it aspires to take on. Moreover, serious shortfalls remain in key areas. The Headline Goal was defined in order to help overcome these shortfalls, to give Europe the capability to act on its own and to strengthen the European pillar of NATO. This goal is yet to be met and greater efforts are required. The more coordinated these efforts are, the sooner the European Union will develop its capabilities and the greater the return on the defence Euro.