The Bundestag’s budget committee finalised Germany’s 2027 federal budget in a reconciliation session that ran through the night into Friday morning. Total spending is set at 560.9 billion euros, up about 7 percent from the previous year and above the 555.4 billion euros in Finance Minister Lars Klingbeil’s original draft, with tax income reaching 396.2 billion euros.
Net borrowing in the core budget comes to just under 123 billion euros, up from 98 billion euros this year. A further 57.8 billion euros comes from the Infrastructure and Climate Neutrality Special Fund and 29.6 billion euros from the Bundeswehr Special Fund, taking overall new borrowing above 210 billion euros, the second highest level recorded after the 215.4 billion euros borrowed in 2021 during the pandemic. Because the special fund loans sit outside the core budget, the constitutional debt brake is still met on the reported figures.
Defence is the largest single driver. Defence spending rises to 109.7 billion euros from 82.7 billion euros a year earlier. The labour and social affairs ministry remains the biggest budget at just over 203 billion euros, and the Federal Labour Office is expected to need an 8.2 billion euro loan to cover higher unemployment benefit costs.
One coalition promise remains unresolved. The proposed cut in the electricity tax for all households, backed by Chancellor Friedrich Merz’s Christian Democrats and worth about 5 billion euros, is still unfunded and has been referred to the coalition committee. The committee approval is provisional in form: the full Bundestag still has to pass the budget in its sitting week of November 24 to 27.