BERLIN (Reuters) - New German Finance Minister Joerg Kukies dampened expectations that a reform of the nation's spending cap, known as the debt brake, could lead to more leeway in the federal budget in an interview with the Handelsblatt newspaper published on Friday.

"You have to look at what is realistic and what there could be a political consensus on," Kukies told Handelsblatt, adding that "in my view, this would be a moderate, targeted reform."

German political parties have bristled over the spending rules, which limits the country's public deficit to 0.35% of gross domestic product, viewing it as a hindrance at a time when the Ukraine war has held back growth in Europe's largest economy.

A dispute over spending had led to the collapse of Germany's government earlier this month, after Chancellor Olaf Scholz fired Kukies' predecessor, Christian Lindner, ending a coalition between Scholz's SPD, Lindner's pro-market FDP and the Greens.

The basic principle of the debt brake is correct, said Kukies, as it ensures budgetary discipline during the good years and allows sufficient financial leeway during times of crises.

Nevertheless, it makes sense to look at the various proposals and evaluate what makes sense to be able to finance the necessary long-term investment needs, added Kukies.

And "even if we did not have a debt brake, we would still be subject to the European debt rules," added Kukies.

"These also require prioritisation because they limit the increase in government spending and require a solid budget policy," Kukies said, adding that he would campaign for Germany to be given more time to submit its spending plans under the new EU debt rules with a view to elections planned for February.

(Writing by Miranda Murray; Editing by Kim Coghill)