Germany Set to Borrow Almost €200bn in 2027 Budget
The German government is preparing a draft budget for 2027 that foresees total new borrowing of €196.5bn, with spending focused on defence and infrastructure.
By comparison, new debt reached €50.5bn in 2024 under the previous government, before Europe's largest economy abandoned years of fiscal conservatism to promote growth and modernisation.
Defence spending is set to rise to €105.8bn in 2027 from €82.7bn in 2026. Including special funds and support for Ukraine, total defence spending is expected to reach €144.9bn.
Total budget spending is projected at €543.3bn, an increase of 3.6% year on year, supported by a €500bn infrastructure fund and an exemption from debt rules for defence expenditure.
Investment is directed primarily toward transport, digitalization and hospitals. The budget process is due to begin in parliament in September, with final approval expected by the end of the year.