The European Commission on Wednesday set out recommendations to improve Europe's fragmented and cash-strapped defence industry, with a focus on pooling resources in areas with dual military and civilian applications.
The ideas were drawn up at the request of European Union member states, who are to discuss defence issues at a summit in December.
There has been notoriously little cross-border cooperation on defence, an area where the EU occupies a backroom role compared to NATO.
The Commission highlighted potential areas of cooperation between civilian and military research to boost competitiveness and generate home-grown know-how shared across EU borders.
It cited satellite applications as a key example, and suggested offering incentives to reduce what have often proved prohibitive costs for European producers.
The Commission also envisages a beefed-up, EU-badged role in peacekeeping and peace-enforcement beyond its borders.
The defence sector in the EU already provides some 400,000 jobs and generated turnover of around 96 billion euros ($125 billion) in 2012.
But sharp cuts to government budgets due to the eurozone debt crisis have left the Commission arguing that research, technology, manufacturing and procurement should all be better integrated, to make money go further.
Special EU rules which allow governments to close off procurement for sensitive defence contracts will also be up for debate by leaders in the run-up to the defence summit.
Commission President Jose Manuel Barroso -- who did little to douse what he told journalists was "speculation" that he may be a candidate to head up NATO next year -- said "the US is asking Europe to do more."
He said a more integrated defence approach would be "complementary to, but not in contradiction with, NATO."
He underlined that "the Commission has no intention of buying military equipment."