Germany Unveils Record Borrowing Plan for 2027

Germany plans to borrow more than €203bn ($232bn) in 2027, according to a draft budget reviewed by Reuters.

The figure is up from the €196.5bn ($224.8bn) projected by the government in April.

By comparison, Germany borrowed €50.5bn ($57.8bn) under the previous government. Last year, Berlin abandoned its long-standing fiscal restraint to support the country's stagnating economy.

Total spending under the draft budget, which forms part of the government's medium-term financial framework through 2030, is set to reach €555.4bn ($635.4bn), up from the €543.3bn ($621.6bn) projected in April.

Public investment will increase to €117.5bn ($134.4bn), nearly €40bn ($45.6bn) more than originally planned. This increase follows approval of a €500bn ($569bn) infrastructure fund and changes to Germany's fiscal rules that exclude defense spending from public debt limits.

The budget also includes a sharp increase in defense spending. Funding is set to rise from €82bn ($94.2bn) in 2026 to €109.8bn ($125.6bn) in 2027. Together with €11.6bn ($13.3bn) allocated for aid to Ukraine and other security measures, total defense spending will reach €130.1bn ($148.8bn).

(Reuters, bak)