The Foreign Secretary stressed during question time that the recent conflict in Kosovo had illustrated that the EU's ability to draw on Nato's assets for crisis management and peacekeeping should be improved.
"Europe spends 60 per cent on its defence, the amount spent by the United States, but in the case of the military aircraft involved in the recent conflict in Kosovo, Europe could only field 20 per cent of those aircraft," he said.
"There is something wrong between that mismatch in spending and the output. It surely must make sense for Europe to co-operate more closely and to make sure that we are better able to get value for our money."
Such action was not "in any way" going to be a substitute for Nato because it was not "about territorial defence but about peacekeeping and crisis management".
"Heaven knows, we have seen the need for that recently in our Continent - it is time we were ready to respond to it."
However, John Maples, Conservative foreign affairs spokesman, warned that the creation of an EU defence alliance, as discussed at the weekend G8 summit in Cologne, would create problems in Europe's relationship with Nato.
"The development of military capability outside Nato as envisaged at Cologne will inevitably create a conflict between the EU and Nato, undermine the US commitment to Europe and give the EU a role for which it is totally unsuited."
Mr Cook dismissed his claims, stressing: "This government believes we are likely to have a bigger impact on what happens in the world if Europe speaks wherever possible with one voice and not with different voices."
Menzies Campbell, for the Liberal Democrats, said he despaired at the "vitriol and irrational anti-Europeanism" of the Tories.Reuse content