KARLSKOGA, Sweden, May 27 (Reuters) - Defence group

Saab's CEO on Tuesday urged European governments to

step up getting EU-backed projects off the ground and said a

military spending boom was only just beginning.

The Swedish defence company is riding the biggest boom in

demand since the end of the Cold War as Europe scrambles to

re-arm in the wake of Russia's invasion of Ukraine and signs

U.S. priorities may be shifting away from the region.

"I think we are only in the beginning of the spending," Saab

CEO Micael Johansson said during a presentation at the company's

plant in Karlskoga, central Sweden. Saab makes a wide range of

military gear including fighter jets, surveillance systems,

missiles and submarines.

"I think Europe will create more and more respect the more

we take our own responsibility," he added. "Spending more (on)

European (defence) is absolutely a trend I believe will be valid

going forward."

The European Union on Tuesday approved the creation of a

150 billion-euro ($170.7 billion) EU arms fund to provide loans

for defence projects, with a strong "buy European" element.

"The next hugely important step is to quickly get going,"

Johansson told Reuters. "The countries have to step forward and

say 'we want to take the lead here'."

The company reiterated its 2023-2027 targets for organic

sales growth of around 18% with operating income rising even

more. Johansson said the goals would be revisited, probably next

year, with growth set to continue well beyond 2027.

Saab last updated its financial targets in February.

Its order intake last year set a new record while its shares

have doubled since the turn of the year, hitting a new

all-time-high this week.

Saab, which competes with giants such as U.S. Lockheed

Martin ( LMT ), France's Dassault Aviation and Britain's

BAE Systems, said it was focused on ramping up capacity

as well as new partnerships and acquisitions.