Germany eyes 1.9 percent increase in spending next year

Germany's Cabinet has approved a budget plan that foresees a 1.9 percent increase in spending next year and calls for the country to keep new borrowing at zero over the next four years.

The plan presented by Finance Minister Wolfgang Schaeuble on Wednesday foresees 335.5 billion euros ($357 billion) in spending next year.

However, Germany holds an election on Sept. 24 and the next government will make the final decisions on the budget.

The Defense Ministry's spending is projected to rise by 1.4 billion euros next year to 38.5 billion euros.

Germany is short of the NATO target of spending 2 percent of GDP on defense. But Schaeuble said Germany is making progress, with its figure expected to rise to 1.23 percent this year from 1.18 last year.