Russian President Vladimir Putin has inadvertently achieved what Western allies have long struggled to: get Germany to step up to its role as a major global power with an assertive foreign policy backed by a strong military despite its war guilt.

German Chancellor Olaf Scholz announced on Sunday a dramatic hike in military spending in view of Russia's invasion of Ukraine in what is being heralded as a historic speech that marks a paradigm shift in German foreign and defense policy.

Scholz said Germany from now on would invest more than 2% of economic output on defense up from around 1.5% currently, after years of resisting pleas from NATO allies to do so, and set up a €100 billion ($112 billion) fund to re-equip the military.