Angela Merkel has underlined Germany's rejection of a claim by US president Donald Trump that her country owes Nato large sums for underspending on defence.
The German chancellor also pointed to decades of post-Second World War military restraint by her country.
Mr Trump tweeted on Saturday, just one day after meeting Mrs Merkel in Washington, that "Germany owes vast sums of money to NATO".
He added: "The United States must be paid more for the powerful, and very expensive, defence it provides to Germany!"
Berlin's defence budget has long been below Nato's target of 2% of a member's gross domestic product.
The figure is currently at 1.23%, though Germany has been raising defence spending and Mrs Merkel has stressed its commitment to reaching the target by 2024.
Mrs Merkel said defence spending is "not just about contributions to Nato, but also about European contributions in Africa for example, UN missions".
She said at a news conference in Hannover with Japanese prime minister Shinzo Abe: "Not a single Nato member state pays its entire defence budget into Nato."
Mrs Merkel said that defence spending "can't be uncoupled from historical developments from one day to the next".
She recalled that the immediate post-Second World War aim was to have a Germany that was integrated into the international community.
Germany gradually emerged from its post-war diplomatic and military shell after reunification in 1990, sending troops to Kosovo and Afghanistan - though it also refused to join the US-led invasion of Iraq in 2003.
Military missions are not popular with the public and are often a subject of agonised political debate.
"Of course the role of Germany has changed," Mrs Merkel said.
"If you look at our military commitment today, then you see that a quarter-century later Germany plays a completely different role.
"But it is a process, and it is a process that the United States of America wanted ... And we cannot simply cast off this process from one day to the next."
She said defence spending is only one contribution to security, along with development aid and political solutions to conflicts.
Mrs Merkel's centre-left rivals in a September election, and current coalition partners, have struck a sharper tone on the Trump administration's reinforcement of demands that Nato allies should pay more.
Spending 2% of GDP on defence would mean doubling Germany's defence budget, and "I don't know who can imagine that something like that is possible," foreign minister Sigmar Gabriel told a congress of his Social Democrats on Sunday.