Chancellor Angela Merkel said on Friday that Germany still intended to increase its spending on defence to 2 percent of economic output in line with the NATO target.

"In Wales in 2014, Germany supported the decision that we want to reach the agreed goal of 2 percent within the next decade and this commitment has not changed - that means we still intend to go down this route," Merkel told a news conference with visiting Canadian Prime Minister Justin Trudeau.

During the U.S. election campaign President Donald Trump accused NATO allies of failing to pay their way, and described the alliance shortly before he took office as "obsolete."