Leading article: Britain's defence is in Europe

There is no doubt that Britain's armed forces are overstretched. When the last strategic defence review was conducted in 1998, there was no hint of the two wars – in Iraq and Afghanistan – that our troops would be fighting in the next decade. Nor, when the engagement in Afghanistan began, was there any thought that the troops would still be there, sustaining casualties, more than eight years on. Now a London think-tank, the Royal United Services Institute, has forecast that the armed forces may have to lose 20 per cent of their strength before 2016 because of "inevitable" cost-cutting.

This has understandably sown alarm in military circles, and forceful representations, in public and in private, can be expected from service chiefs in the months to come. But while defence funding is safe for the next year, it is unlikely to be exempt from the swingeing reductions in public spending expected thereafter. Nor should it be. The military, which has rightly received urgent additional spending, not least to upgrade equipment in combat zones, will have to make its contribution.

And there are areas where spending can be cut. Bernard Grey's review of defence procurement last year exposed profligacy and inefficiency on a grand scale. According to official figures released yesterday, one in five soldiers is unfit for frontline service. By international standards, Britain has an unusually large number of its military employees desk-bound, and in terms of ranks it is top-heavy. The war in Afghanistan, where the Army bears the brunt of responsibility, has fuelled inter-service rivalry, and there is still resistance to joint operations, either with home or foreign partners.

As it happens, several reviews are in train that present opportunities for an overdue reorientation of British defence policy. A defence Green Paper is in preparation as a prelude to a full strategic defence review after the election, and Nato is in the throes of a re-think of its own. One obvious answer for Britain – and one that offers mutual benefits – is greater alignment with Europe. With no option but to cut our military coat according to the country's cloth, we are fortunate to have such a promising alternative.