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* Graphic on EU defence spending http://tmsnrt.rs/2ctbMmP
* Joint defence research to renew fleets, end waste
By Robin Emmott
BRUSSELS, Nov 30 (Reuters) - The European Union will unveilits biggest defence research plan in more than a decade onWednesday to reverse billions of euros in cuts and send amessage to U.S. President-elect Donald Trump that Europe wantsto pay for its own security.
Part of a broader push to revitalise defence cooperation,the European Commission will propose a defence fund and seek tolift a ban on the EU's common budget and its development bankinvesting in military research.
The main proposal, to be presented at around 12 p.m. (1100GMT), is an investment fund for defence, which could allow EUgovernments that pay into it also to borrow, ensuring funds arealways available for joint defence programmes such ashelicopters or drones.
The fund, which could start on a small scale in 2017, couldbe backed by the European Investment Bank to finance projects ifgovernments agree to remove the ban on backing militaryprojects.
With the Commission overseeing a common EU budget of about150 billion euros ($160 billion) a year, France and Germany sayit is time to allow it to be used for military research.
The European Parliament has approved a 90 million euro pilotplan for 2017 to 2019 and the Commission could potentiallyallocate 3.5 billion euros from the budget between 2021 and2027, officials say.
Defence research spending by EU governments has fallen by athird since 2006, leaving the European Union reliant on theUnited States for advanced warfighting equipment.
During the U.S. election campaign, Trump questioned whetherthe United States should protect allies seen as spending toolittle on their defence, raising fears that he could withdrawfunding for NATO at a time of heightened tensions with Russia.
France and Germany rely on ageing military transport planes,for example, while some navy helicopters have been groundedbecause of technical faults related to long years of service.
A report by the German military seen by Reuters on Tuesdayshowed its Tornado jets had a readiness rate of just 44 percentand its newer Eurofighters were ready for use 52 percent of thetime, well under the goal of an average 70 percent readiness.
"Europe has to be very careful that the investment gap isnot translated into an ever wider technology gap," EU foreignpolicy chief Federica Mogherini told defence contractors andofficials at a speech earlier this month.
"If left unchecked, this could translate into a politicalgap which would clearly not be in our interest," she said,referring to a potential loss of the EU's foreign policy clout.
BREXIT DILEMMA
An earlier Commission plan in 2003 failed to win overgovernments. This time around, France, Germany and Italy areseizing on Britain's decision to quit the bloc. They see it asremoving an obstacle to deeper defence cooperation, givenBritain's fears about a European army run from Brussels.
Britain's departure removes one of the biggest contributorsto the EU budget, although it is not clear if Britain would seekto collaborate on defence from outside the bloc.
"We see EU defence as detrimental to NATO, but if there aremajor collaborative research projects, we would want to be partof them," said Geoffrey Van Orden, a former brigadier in theBritish army and now a lawmaker with the eurosceptic EuropeanConservatives and Reformists group in the European Parliament.
Germany and France say sharing resources may be the only wayto sustain adequate military forces. EU officials point to themerger of missile systems companies in France, Italy and Britainin 2001 to create MBDA, the only European group able to designand produce world-class missile systems.
Waste is also a problem, as European governments championnational defence contractors. According to EU data, the bloc has19 types of armoured infantry fighting vehicle, compared withone in the United States. ($1 = 0.9438 euros)
(Additional reporting by Andrea Shalal in Berlin; Editing byRobin Pomeroy)