By Vladimir Soldatkin

SOCHI, Russia (Reuters) – A ballistic missile defense shield which the United States has activated in Europe is a step to a new arms race, Russian President Vladimir Putin said on Friday, vowing to adjust budget spending to neutralize “emerging threats” to Russia.

The United States switched on the $800 million missile shield at a Soviet-era base in Romania on Thursday saying it was a defense against missiles from Iran and so-called rogue states.

But, speaking to top defense and military industry officials, Putin said the system was aimed at blunting Russia’s nuclear arsenal.

“This is not a defense system. This is part of U.S. nuclear strategic potential brought onto a periphery. In this case, Eastern Europe is such periphery,” Putin said.

“Until now, those taking such decisions have lived in calm, fairly well-off and in safety. Now, as these elements of ballistic missile defense are deployed, we are forced to think how to neutralize emerging threats to the Russian Federation,” he said.

Coupled with deployment in the Mediterranean of U.S. ships carrying Aegis missiles and other missile shield elements in Poland, the site in Romania was “yet another step to rock international security and start a new arms race”, he said.

Russia would not be drawn into this race. But it would continue re-arming its army and navy and spend the approved funds in a way that would “uphold the current strategic balance of forces”, he said.

U.S. Deputy Defense Secretary Robert Work said on Thursday that the shield would not be used against any future Russian missile threat.

Frank Rose, deputy U.S. assistant secretary of state for arms control, warned at the time that Iran’s ballistic missiles could hit parts of Europe, including Romania.

Putin said the prospect of a nuclear threat from Iran should no longer be taken seriously and was being used by Washington as an excuse to develop its missile shield in Europe.

The full defensive umbrella, when complete in 2018 after further development in Poland, will stretch from Greenland to the Azores.

It relies on radars to detect a ballistic missile launch into space. Sensors then measure the rocket’s trajectory and destroy it in space before it re-enters the earth’s atmosphere. The interceptors can be fired from ships or ground sites.

(Reporting by Vladimir Soldatkin; Writing by Dmitry Solovyov; Editing by Lidia Kelly and Richard Balmforth)