(Recasts with Rasmussen event)
By Phil Stewart
WASHINGTON, March 19 (Reuters) - The head of NATO warned on Wednesday that Russian President Vladimir Putin may not stop with the annexation of Crimea and said the crisis should serve as a "wake-up call" for European nations to bolster defense spending.
NATO Secretary-General Anders Fogh Rasmussen said Russia's move to annex Crimea following a Kremlin-backed referendum on Sunday had triggered "the gravest threat to European security and stability since the end of the Cold War."
"My major concern is that this won't stop," Rasmussen told a gathering at the Brookings Institution, a Washington think-tank.
"Crimea is one example. But I see Crimea as an element in a greater pattern, in a more long-term Russian, or at least Putin, strategy. So of course our major concern now is whether he will go beyond Crimea."
Rasmussen acknowledged there were "no quick and easy ways to stand up to global bullies," without naming Russia explicitly. He then listed the ways NATO has responded so far to the crisis including by bolstering an air policing mission in the Baltic nations and surveillance flights over Poland and Romania.
"No one wants to turn away from our cooperation with Russia. But no one can ignore that Russia has violated the very principles upon which that cooperation is built," he said.
"So business as usual is not an option."
Since the end of the Cold War, NATO has shifted its attention to Afghanistan, Kosovo and counter-piracy operations off the coast of Somalia, as well as Libya during its 2011 civil war. The Ukraine crisis has put Russia into focus and sharpened concerns about NATO defense spending.
In recent years, austerity-hit European Union countries have slashed spending, scaling back on ships, tanks and fighter jets, and increasingly relying on the United States, which contributes about three-quarters of NATO defense spending.
Rasmussen cautioned that European security could no longer be taken for granted and that European states needed to "step up politically and militarily" after Russia's actions.
"The Ukraine crisis and what we have seen in Crimea has been a wake-up call and it must be followed by increased European investment in defense if we are to ensure a credible deterrence and collective defense in the future," he said.
U.S. Vice President Joe Biden said in Warsaw on Tuesday the United States may run more ground and naval military exercises to help the Baltic states bordering Russia beef up their capacity.
Rasmussen said he expected NATO to do more in the days ahead.
"I envisage further steps to reassure allies, to strengthen deterrence and collective defense, in light of what we have seen," he said, without offering details.
Rasmussen also predicted some NATO assistance to Ukraine would be approved at a NATO foreign ministers meeting in early April, but did not venture into specifics.
"I agree we (NATO) should step up assistance to Ukraine and I am sure it will happen," he said.
The United States has agreed to send Ukraine military rations but has not yet approved requests for lethal assistance, like weapons. (Reporting by Phil Stewart; additional reporting by Adrian Croft and Peter Apps; Editing by Warren Strobel, Mohammad Zargham and Paul Simao)