Bundestag agrees German budget with record spending

The budget committee of the Bundestag approved the draft federal budget of Germany for 2027 with expenditures of €560.92 billion, the press service of the parliament reported. This is a record amount of spending by Germany, notes Tagesschau.

The budget meeting lasted more than 15 hours - from 14:30 on November 12 local time to 05:55 on November 13. Deputies considered about 2 thousand proposals. The project was supported by representatives of the ruling coalition of the CDU/CSU and the SPD, opposed by Alternative for Germany, the Greens and the Left Party. The final vote of the Bundestag on the budget is scheduled for November 24-27.

Compared to the government project, spending increased by €5.48 billion. They are also 6.9 per cent above the 2026 plan, which stands at €524.54 billion. The volume of investments in the main budget of the Committee increased by €5.58 billion to €61.85 billion. "The federal government could spend more money next year than ever before," Tagesschau wrote.

Net new borrowing in the core budget is planned at €122.97 billion against €97.96 billion in 2026. The committee increased them by €4.25 billion over the government's project. At the same time, €84.55 billion will not be taken into account when calculating constitutional limits on borrowing, thanks to the exclusion for defense and some other security-related costs.

For comparison, according to the preliminary results of 2025, German federal budget expenditures excluding special funds amounted to €495.5 billion, and income without new borrowings - €428.6 billion. The difference of €66.9 billion was covered by loans.

Taking into account special funds, new borrowing will amount to about €210 billion, Handelsblatt writes. The publication notes that about one in three euros of total expenses will be covered by debt financing.

“Expenditure is covered by income to the same extent. Tax revenues are planned at €396.21 billion, up €1.49 billion from the government project. Other revenues amount to €41.74 billion, which is €249 million less than in the project, the press service noted.

In March 2025, the Bundestag approved amendments to the German Constitution easing restrictions on government borrowing. They allowed to remove defense spending above 1% of GDP from the impact of the “debt brake”, and also provided for the creation of an infrastructure fund of €500 billion.

Amid increased borrowing, Germany’s Federal Court of Auditors warned in September 2026 of the risk of a “debt trap.” According to the agency, debt service costs may require new loans and accelerate the growth of debt. The chamber predicted an increase in the share of interest expenses in the budget from 5.8 to 12.7% by 2030 and called for more effective compliance with debt restrictions.

In August, S&P reduced Germany’s AAA credit rating. S&P noted that the rating of Germany may be under threat if the country’s economic performance is significantly worse than forecasts. Bild attributed this risk to rising debt loads and weak economic dynamics.

In July, German Finance Minister Lars Klingbail explained the increase in the national debt by the need to modernize the armed forces. “We want our country to catch up on defense spending over the next 20 years, and that’s what we’re doing by investing to achieve that goal,” he said.

In addition, Germany opposes the proposed increase in the EU budget for 2028-2034 to €2 trillion. In September, Chancellor Friedrich Merz and the leaders of the Netherlands, Sweden, Denmark, Austria and Finland demanded that the project be cut by hundreds of billions of euros. The countries explained the position by the need to restrain public spending and threatened not to support the financial plan without its revision.