* EU's top officer warns bloc's military in decline
* Cautions EU defence has sunk to critical point
* Defence cuts, rising costs blamed
By Adrian Croft
BRUSSELS, Sept 19 (Reuters) - Many European Union countries will not be able to afford key parts of their armed forces, such as air forces, in a few years unless they spend more and cooperate more closely on defence, the top EU military officer said on Wednesday.
In a hard-hitting speech, Hakan Syren, a Swedish general who chairs the EU's Military Committee, the bloc's highest military body, said rising costs, inefficiencies and budget cuts had brought European defence to a critical point.
"The military capabilities of the EU member states are on a steady downward slope," Syren told a seminar in Brussels organised by Cyprus, which currently holds the EU presidency.
"Looking a few years into the future, it is simple mathematics to predict that many member states will be unable to sustain essential parts of their national forces, air forces being the prime example," said Syren.
He said he was speaking out now because he is nearing the end of his three-year term as chairman of the Military Committee.
Many EU states have slashed defence spending as part of deficit-cutting measures forced on them by the financial crisis, which has plunged the euro zone into turmoil. Only a handful of NATO's European members meet the alliance's goal of spending 2 percent of their economic output on defence.
Syren said the defence cuts had only exacerbated other problems. EU member states spent their defence budgets inefficiently, creating overcapacity in some areas while failing to invest in "critical shortfalls" in others, he said, spelling out the risk that Europe could be marginalised militarily.
It was "embarrassingly obvious" that long identified European deficiencies such as intelligence, precision-guided munitions and air-to-air refuelling had not yet been fixed, he said.
He cited the high cost of military operations as another pressure on European armed forces. Many European countries have troops with the NATO-led force in Afghanistan and some took part in NATO's Libya operation last year.
Defence experts accuse European governments of duplicating effort by ordering military equipment to national specifications rather than standardising on one European-wide system.
Syren said the merger being discussed by Franco-German dominated EADS and Britain's BAE Systems, which would create a global aerospace and defence giant with combined sales of $93 billion, would be "a very great step" towards reducing such duplication.
Three years ago, the combined defence budgets of EU member states of around 200 billion euros ($260 billion) a year were equivalent to the defence spending of China, Russia, Japan, India and Saudi Arabia put together, he said.
If present trends continued, he said, "we will soon see China as well as Russia on almost equal terms" with the EU.
Syren urged EU governments to respond by raising defence spending and by deepening defence cooperation among themselves.
EU governments have already reacted to the new age of austerity by pooling resources in some areas of defence but Syren said this needed to be taken to a "completely new level".
He suggested this could be achieved by setting aside an increasing portion of the national defence budgets of EU member states for common European purposes.
The money set aside for a central European pot could start at 5 percent of nations' defence budgets and increase to 25 percent, or some 50 billion euros a year, in 10 years, he said.
His proposal is unlikely to find favour with big EU military spenders such as Britain and France, which would bankroll a large part of the common EU defence budget under his proposal. (Editing by Sophie Hares)