EU leaders meeting in Brussels agreed on Thursday on the general need to increase cooperation on defense issues, but not on how to do it.

"Cooperation in the area of military capability development is crucial to maintaining key capabilities, remedying shortfalls and avoiding" duplication, a joint statement released at the end of the first of two days of summit talks said.

They also called on EU states to "deepen defense cooperation by improving the capacity to conduct missions and operations," based on a "more integrated" European defense industry.

During the discussions that led to that joint statement, German Chancellor Angela Merkel said it was clear that there was much more that EU member states could do to ensure that they use their limited resources wisely.

In this area "Europe can work much more closely together," Chancellor Merkel said. "We can pool our armament activities, but more than anything else, we must also pursue a coordinated policy globally."

France's president, Francois Hollande, suggested that Europeans could work on specific joint military projects, such as building drones. He also called for common EU funding for military missions, such as his country's current deployment in the Central African Republic.

British Prime Minister David Cameron agreed that more cooperation was desirable, but stressed his government's opposition to the idea of a military force under a European flag.

"It makes sense for nation states to cooperate over matters of defense to keep us all safer... but it is not right for the EU to have capabilities, armies, air forces and the rest of it," the UK premier said as he arrived in Brussels.

"We have to get that demarcation correct, between cooperation which is right, but EU capabilities which is wrong," Cameron added.

Bank deal

Meanwhile, just hours before the start of the summit, EU leaders announced that they had agreed on a banking union deal that would allow for the creation of a single body to regulate and wind up ailing banks. This would be backed up by a fund set up by the banks themselves, in an effort to minimize the need to use taxpayers' money in any future bank bailouts.

While it was hailed as a landmark agreement by some, the president of the European Parliament, Martin Schulz, quickly warned that EU lawmakers would not approve the deal in its current form.

Schulz said the proposed deal set up was "very far" from what the European Parliament had envisaged, questioning in particular provisions for a common fund to pay for bank closures, saying it was "unacceptable" that these had been placed beyond the scrutiny of lawmakers.

pfd/ccp (AFP, AP, Reuters)