NATO Secretary-General Anders Fogh Rasmussen said in a speech in Brussels failure to standardise equipment, from helicopters to combat vehicles, was also adding to costs.
He said some of the 44 nations in the NATO-led force in Afghanistan relied on systems that allowed them to track only their own troops' movement, not those of other allied soldiers.
"The commander in Helmand province in Afghanistan has needed four different radios to communicate with four different national contingents," he told the Belgian defense institute.
"Similarly, we found that different Friendly Force Tracking Systems allowed nations to track their own forces, but not those of other nations - putting lives at risk," he said.
It made no sense for Europe to have more than a dozen competing naval shipyards and 12 separate armored vehicle manufacturers.
"Do we really need so many different types of infantry combat vehicles, or radios, or helicopters?" he asked.
"If European nations buy 600 NH-90 helicopters, does each of them really have to certify its allotment on a national basis - when it is estimated that, if this certification were harmonized, it could save up to 5 billion euros?"
NOT AN EXCUSE TO CUT SPENDING Rasmussen, who is trying to move away from NATO's old Cold War structures toward a more dynamic force, said a need to standardise should not be an excuse to cut spending on defense.
"If we want NATO to be more anticipatory, more deployable, and more adaptable to a wide range of circumstances, the alliance also has to be appropriately resourced," he said.
The key to tackling the challenges of modern warfare is working together to build weapons and systems that are compatible and therefore cheaper in the long run, he said.
"When I look at the extensive allied inventories of tanks and fighter jets and compare them with the analysis of what conflict is likely to look like in the future, I am convinced that we do not need them all," he said.
"I understand that there are strong national interests at work here, and in the current economic climate, there is a real danger of protectionism. But we must resist these temptations - purely national thinking is no longer affordable," he said.
Nowadays, even the larger nations among the 28 NATO states could not be expected to be able to cover all military capabilities, such has as strategic air transport, combat helicopters, fighter aircraft, or main battle tanks, he said.
"If we were able to agree on who does what in these increasingly expensive areas, then nations - or groups of nations - could sacrifice certain national capabilities and re-invest in their specific area of expertise," he said.
