Europe "must wake up once and for all", Sanchez told a conference of ambassadors in Madrid.

"In a world like this, adapting to the geopolitical reality is not enough," he said.

"Europe must be capable of strengthening itself to influence (this reality) and defend (its) interests and values" because countries plagued by "armed terrorist groups", wars and autocracies surround the continent, Sanchez said.

Donald Trump's return to the White House next week has fuelled uncertainty about the United States' commitment to European allies.

The Republican has demanded NATO members ramp up defence spending to five percent of GDP and said he would achieve a swift settlement to Russia's invasion of Ukraine, which is approaching the three-year mark.

Despite the shortcomings identified by Sanchez, particularly in European cybersecurity, the Socialist premier said he would "never encourage a militaristic drift that leads us to a new arms race".

"Spain believes in peace and diplomacy as the formula to resolve conflicts and I will always maintain that security goes far beyond defence spending."

With Trump's comments sparking fears that Ukraine will be forced to cede territory to Moscow, Sanchez emphasised the need for "unity" against Russian President Vladimir Putin and a "just and sustainable peace".

Leaders from the European Union, Britain and NATO will gather in Belgium on February 3 for extraordinary defence talks after Trump's inauguration.