Federal budget: Cabinet approves the draft budget for 2027

The cabinet led by Chancellor Friedrich Merz (CDU) has approved the government’s draft budget for next year. Federal Finance Minister Lars Klingbeil (SPD) estimates spending of 555.4 billion euros for 2027 – far more than the 524.5 billion in the current year. The budget is also to be financed through new debts amounting to more than 200 billion euros. The reasons for the high expenditure are, in particular, the effects of the Iran war, the increased energy prices and the weak economic situation.

One focus is primarily on the Bundeswehr, into which significantly more money is to flow: Defense spending of around 109.7 billion euros is planned in the core budget for 2027 – a third more than in 2026. More should also be invested in infrastructure.

At the same time, savings should be made elsewhere, including in funding programs and in the climate and transformation fund. The budget is expected to be passed by the Bundestag in the fall.

The Left criticizes the lack of relief

Criticism of the plans came from the Left and the Greens even before the budget was passed by the cabinet. Left co-leader Ines Schwerdtner criticized wrong priorities. The economy continues to weaken despite the “record budget,” she said on ZDFMorning magazine – which, in their view, is also due to the fact that the government is not doing enough to relieve the financial burden on citizens and thus support economic development.

Green Party leader Felix Banaszak particularly spoke out against the planned handling of the climate and transformation fund. The income from the CO₂ price is “not a self-service shop for the finance minister,” but is intended to finance the climate-neutral restructuring of the economy, support companies in their transformation and relieve citizens of the costs of climate protection, said Banaszak at Table.Media.

Union parliamentary group vice-president Mathias Middelberg again defended the planned cuts in state funding programs as necessary and overdue. On Deutschlandfunk, the CDU politician said that the state was distributing too much money overall and that it had to give companies, consumers and the private sector more resources instead of channeling them through state coffers and programs. Expenditures in the climate and transformation fund in particular must therefore be examined closely: “Are we achieving more climate protection or are we not just spending money and writing climate on top of it? And the latter has been the case so far,” he said on Deutschlandfunk.