Germany Approves 2027 Budget With €110 Billion Defense Boost and €203.6 Billion Borrowing
Updated
Updated · DW (English) · Jul 6
Germany Approves 2027 Budget With €110 Billion Defense Boost and €203.6 Billion Borrowing
3 articles · Updated · DW (English) · Jul 6
Summary
Germany’s cabinet approved a 2027 draft budget that lifts defense spending by about one-third to nearly €110 billion, sending the plan to parliament for final approval.
The €555.4 billion budget allows up to €203.6 billion in borrowing to fund military rearmament and long-delayed repairs to infrastructure after years of austerity.
Defense outlays rise from €82.2 billion in 2026, reinforcing Chancellor Friedrich Merz’s push to accelerate NATO spending as Germany targets 3.5% of GDP by 2029.
Parliament is due to begin budget talks in September, with final approval expected by year-end as Berlin also maps a much larger defense buildup toward 2030.
As Germany borrows billions to rearm, is it building European security or deepening continental divides?
With Germany breaching EU debt limits for defense, are the bloc's shared fiscal rules now obsolete?
Forced by an energy crisis to abandon austerity, can Germany's national spending spree fix its broken economy?
Germany’s €555 Billion Fiscal Pivot: Inside the 2027 Budget’s Economic, Political, and European Impact
Overview
Germany is set to make a major shift in its fiscal policy with the 2027 draft budget, moving away from its usual conservative spending. The government plans to approve the budget soon, with parliamentary debates starting in September and final approval expected by the end of the year. This new budget assumes that the Middle East conflict will calm down over the summer, but warns that ongoing disruptions in the Strait of Hormuz or oil production could have serious effects on Germany’s economy. This bold approach marks a turning point in how Germany manages its finances and prepares for global uncertainties.