Germany will be increasing its defense spending to 2 per cent from their economic output in line with an agreement that NATO states reached in 2014.
“Germany would drastically increase defense spending in the coming years to move towards the NATO target for member states to spend 2 percent of their economic output on defense,” German Chancellor Angela Merkel said Saturday.
Merkel was quoted as saying by Deutsche Welle that US President Barack Obama had informed her it should not be any longer the case that the US spends 3.4 percent of its gross domestic product (GDP) on security whereas Germany, its NATO ally spends only 1.2 percent of GDP on that.
"To get from 1.2 percent to 2 percent, we need to increase it by a huge amount," Merkel said.
To meet that target, Germany's defense spending would have to rise to some 60 billion euros ($65.8 billion). The current planned military budget for the year 2020 is 39.2 billion euros ($43.1 billion).
The contributions that NATO members make to the costs of the alliance are calculated with reference to their gross national income. Currently the US is paying 22 percent of NATO costs, compared with 15 percent for Germany, 11 percent for France and 10 percent for the UK.