Germany rejects Trump's claim it owes Nato and US 'vast sums' for defence

'Spending also goes into UN peacekeeping missions, into our European missions and into our contribution to the fight against Isis terrorism,' says defence minister Ursula von der Leyen

German Defence Minister Ursula von der Leyen refuted Mr Trump's claim that her country owes the US lots of money (Reuters)

Donald Trump's claim that Germany owes Nato and the United States "vast sums" of money for defence has been rejected by German Defense Minister, Ursula von der Leyen.

"There is no debt account at Nato," Ms von der Leyen said in a statement, adding that it was wrong to link the alliance's target for members to spend two per cent of their economic output on defence by 2024 solely to Nato.

"Defence spending also goes into UN peacekeeping missions, into our European missions and into our contribution to the fight against Isis terrorism," Ms von der Leyen said.

She added that everyone wanted the burden to be shared fairly and for that to happen it was necessary to have a "modern security concept" that included a modern Nato but also a European defence union and investment in the United Nations.

Shortly after meeting German Chancellor Angela Merkel in Washington, Mr Trump said on Twitter that Germany "owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!"

Trump has urged Germany and other Nato members to accelerate efforts to meet the alliance's defence spending target.

German defence spending is set to rise by 1.4 billion euros to 38.5 billion euros in 2018 - a figure that is projected to represent 1.26 per cent of economic output, Finance Minister Wolfgang Schaeuble has said.

In 2016, Germany's defence spending ratio stood at 1.18 per cent.

During her trip to Washington, Ms Merkel reiterated Germany's commitment to the two percent military spending goal.