The newspaper "Bild am Sonntag" (BamS) quoted Schäuble as saying that Germany would have to "shoulder" a greater load for defense in the next few years because of crises and instability worldwide.
"I have suggested that we increase spending on development aid moderately. And, we will have to expend more in the coming years on defense and internal security," said Schäuble, who last year staked his reputation on balancing the federal budget, without new borrowings - for the first time since 1969.
"The world has unfortunately become more unstable," he said on Sunday.
Schäuble said his intended boosts could only apply from 2017, despite recent reports about equipment defects that embarrassed Germany's Bundeswehr armed forces and extra funds sought by his defense counterpart Ursula von der Leyen.
"Short-term, meaning for the coming year, we can achieve little with higher defense expenditure, however, because industry cannot deliver on big defense projects so quickly," the German finance minister told BamS.
He was referring to preliminary "cornerstone" talks currently taking place in Berlin on next year's overall national budget. Last year, federal expenditure totalled 295,5 billion euros ($330,7 billion)
NATO vows turnaround
Last September, NATO leaders vowed to "reverse the trend of declining defense budgets."
Germany, however, reduced its defense spending by about 800 million euros to 32.44 billion euros ($36.31 billion) - far below NATO's recommended level of 2 percent of GDP.
GDP share under 2 percent
Last month, a Britain-based think tank, the European Leadership Network, said the trend in many European NATO member countries in 2015 was still toward reduced military expenditures.
Only Estonia would reach a spending goal of 2 percent of Gross Domestic Product (GDP), the report said, referring to Estonian fears that Russia might reach beyond Ukraine toward former Baltic Soviet states.
"Despite Russian aggression in Ukraine and much rhetoric from NATO leaders that this has been a game-changer in European security, all the evidence suggests there is a continuation of business as usual," wrote Ian Kearns, the network's director and co-author of the report.
Germany's defense outlay had declined both in terms of spending and as a proportion of the country's overall economic output, said the network's report.
The string of reports in Germany included army instructors being stranded in Bulgaria when their plane broke down, uninhabitable barracks, and maritime helicopters being declared unsafe for water crossings.
Recent Afghanistan mission blamed
Germany's former chief of staff, Harald Kujat, told public Berlin-Brandenburg radio last September that the problem stemmed from the German military's involvement in large operations abroad, like recently concluded assignments in Afghanistan.
Equipment maintenance and replacement had not kept pace, he said.
ipj/kms (AP, dpa, AFP, Reuters )