German draft budget foresees more than €203 billion in borrowing: Reuters
The draft lifts investment to €117.5 billion and defence spending to €130.1 billion as Germany tries to shore up its sluggish economy.
- Germany plans to lift 2027 borrowing to more than €203 billion , according to a budget draft seen by Reuters on Friday, with Cabinet approval expected on Monday.
- Berlin ramps up investment and defense to shield its sluggish economy from war-related energy shocks, using a rule change that allows defense spending to be excluded from debt limits.
- Total spending is set at €555.4 billion, featuring €117.5 billion in investment, while core defense spending rises to €109 billion from €82 billion in 2026.
- Defense spending reaches €130.1 billion after adding €11.6 billion for Ukraine and €9.4 billion for security, with new borrowing for the core budget rising to €118.7 billion.
- The budget assumes the Middle East conflict will ease, though officials warn disruptions to the Strait of Hormuz would have "far-reaching consequences," with parliamentary discussions commencing in September.
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The draft budget foresees significantly higher debts, and the Finance Minister says why.
Sueddeutsche Zeitung
On Monday, the Federal Cabinet intends to adopt the government's draft budget for 2027 and the financial plan for 2030.
Federal Finance Minister Klingbeil plans a higher new debt for the coming year than was initially planned. The cabinet proposal, which is to be discussed on Monday, talks about almost 119 billion euros - about eight billion more than originally targeted.
According to a draft budget, Federal Finance Minister Klingbeil plans for the coming year with higher expenditures - and also new debts. The latter sum up to 203 billion euros.
Finance Minister Klingbeil has to take up debts of eight billion more than planned for the budget in 2027. The Greens criticise this: "The ministries are supposed to deliver vague efficiency gains, the reserve is plundered contrary to all promises," says Sebastian Schäfer.
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