Germany to boost mid-term defense spending

BERLIN (Reuters) - Germany plans to boost its defense budget by 6.2 percent over the next five years in response to growing global instability, government sources said on Tuesday.

After balancing its budget for the first time in almost half a century, the German government has more leeway to raise spending. The cabinet is due to debate the framework for its mid-term budget on Wednesday.

The defense budget will rise by 1.2 billion euros in 2016 to 34.2 billion and increase to some 35 billion by 2019, allowing the defense ministry to push ahead with plans to modernize the army, the sources said.

The extra funds will also serve to finance the German army’s increased engagement with NATO, which is carrying out more exercises and maneuvers than previously as tensions grow between Russia and northern Europe.

NATO complains that currently only three of its 28 members meet its target of spending at least 2 percent of economic output on defense - the United States, Britain and Greece. NATO leaders agreed in Wales last year to move towards that goal.

Germany, Europe’s largest economy, spends roughly 1.3 percent of its gross domestic product (GDP) on defense.

Reporting by Sabine Siebold; Writing by Caroline Copley; Editing by Stephen Brown