NATO officials are increasingly concerned about the impact on defence of budget cutting measures by European governments after Denmark pulled out of a major project to give the alliance a high-tech new ground surveillance system. “I strongly regret this decision,” said NATO Secretary-General Anders Fogh Rasmussen.

“AGS (Allied Ground Surveillance) is designed to make soldiers from all NATO countries safer and more effective when they are deployed on operations. Denmark’s’ withdrawal from the program sends the wrong signal to our forces and to other allies,” the former Danish prime minister said in a statement, on 23 June.

Although Denmark’s contribution represents only 3.5% of the estimated €1.5 billion project to develop a fleet of unmanned eye-in-the-sky aircraft for the alliance, the government’s decision to pull out is a blow. It took years of studies and negotiations before 15 allied nations agreed late last year to move ahead with the project, which is supposed to be a major boost to battlefield reconnaissance. However, Danish Defence Minister Gitte Lillelund Bech said the cuts are necessary as part of plans to cut the defence budget by DKK1.4 billion (€190 million).

Rasmussen’s spokesman said the Danish decision was the first where the financial crisis had led a NATO ally to pull out of a major international contract. “We don’t want it to be part of a trend,” James Appathurai told Europolitics.

However, other nations are also making deep defence cuts. The incoming Dutch government will have to consider a vote by members of the outgoing parliament to withdraw from the development of the Joint Strike Fighter, which is led by the US, and Britain in March cut its orders for the Airbus A400M military transport plane from 25 to 22. France this month announced it would be trimming €5 billion from the defence budget over the next three years.