"It is a war against Europe and not just a war against the territorial integrity of Ukraine," Merz told parliament ahead of a vote on plans that also include massive new funding for infrastructure.

Merz said Russia's aggression had included cyber-attacks and espionage, arson and contract killings as well as disinformation campaigns that "attempt to divide and marginalise the European Union".

Europe today faces "an aggressive Russia" as well as "an unpredictable United States of America", said Merz, whose conservative CDU/CSU bloc won last month's general elections.

Merz's plans envisage exempting defence spending from the country's strict debt rules when it exceeds one percent of GDP and setting up a 500-billion-euro ($545-billion) fund for infrastructure investments over 12 years.

His bloc is hoping to push the measure through the Bundestag at a time when US President Donald Trump's outreach to Russia and hostility towards Ukraine have shaken Europe and cast doubt over the future strength of transatlantic ties.

"I want to make this clear: I am in favour of us doing everything we can to uphold transatlantic cooperation," said Merz. "I consider it indispensable, but we must now do our homework in Europe.

"We must become stronger. We must ensure our own security. That is our responsibility. Germany has a leading role to play in this, and I believe we should be prepared to assume this leadership responsibility."

Merz said the spending boost planned for the armed forces, expected to add up to hundreds of billions of euros in the coming years, is "nothing less than the first major step towards a new European defence community".

He said this grouping would include "countries that are not members of the European Union but are very interested in building this common European defence together with us such as... Great Britain and Norway".

Merz said new defence contracts should be awarded to European manufacturers "whenever possible".

"We must rebuild our defence capabilities," he told lawmakers, adding that this should be done with "automated systems, with independent European satellite surveillance, with armed drones, and with many modern defence systems" ordered from firms on the continent.