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German Chancellor Angela Merkel and Vice Chancellor Sigmar Gabriel arrive for a meeting with German government's Social Partners, leaders of labor unions and employer organizations, at the government guest house Meseberg Palace, Germany, June 14, 2017. REUTERS/Hannibal Hanschke


MESEBERG, Germany (Reuters) - German Chancellor Angela Merkel plans to raise development spending if she wins September's elections, and has already agreed on the issue with Finance Minister Wolfgang Schaeuble.

Merkel, leader of the conservative Christian Democratic Union party, said on Wednesday that existing plans to boost military spending by 14 percent while raising development aid by only 1.7 percent would be changed whichever party won.

"It's inconceivable that one would do something on one side but not the other," Merkel said. "We may have to pursue completely different paths in development policies."

Her comments came after Foreign Minister Sigmar Gabriel, a Social Democrat (SPD), told reporters that the government should reverse course and spend more on development programmes.

The SPD favours moving away from a NATO target of spending two percent of gross domestic product on defence, while Merkel has pledged to uphold the goal.

Gabriel's stance has frustrated U.S. officials, who have long urged Germany to boost defence spending - a theme seized on by President Donald Trump.

Gabriel said the issue could be a hot topic in the election campaign but played down the differences with Merkel, saying that both agreed on the importance of other factors besides the military in achieving peace and stability.

"We know that we cannot achieve peace and stability in the world with military means alone," he said after coming under criticism from opposition parties for failing to halt arms sales to volatile regions last year.

In 2014, Gabriel, then economy minister, introduced tighter controls on arms exports to conflict zones, but in 2016 the three biggest buyers were Qatar, Algeria and South Korea.

More than 70 years after World War Two, Germany is reluctant to send troops on foreign missions, but has long encouraged military exports and has been ranked the world's fifth biggest major arms exporter by the SIPRI research institute.

Both parties have called on the United States and other countries to meet a NATO target for members to spend 0.7 percent of GDP on development, a goal already met by Germany.

(Reporting by Andrea Shalal and Andreas Rinke, and Reuters TV; editing by Alexander Smith)

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The citizens' meeting

The citizens' meeting

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