Defensive spending is dominating the German budget planning process. According to officials, the planned defense budget for 2027 is set at 105.8 billion euros, which marks a significant increase of roughly 75 percent compared to 2025. Looking ahead, planned defense expenditures continue to climb: 149.9 billion euros are projected for 2028, 158.9 billion euros for 2029, and 179.9 billion euros by 2030.
These defense figures contribute to the overall federal budget projections. The total federal budget is expected to reach 543.3 billion euros in 2027, growing to 586.9 billion euros in 2028, remaining steady at 588.9 billion euros in 2029, and reaching 625.1 billion euros in 2030. Despite the massive increase in defense spending, the remaining non-defense portion of the budget in 2030 would only be slightly higher-just over two percent-compared to 2025.
Funding this trajectory, spending on interest costs is also set to rise considerably. After 29.9 billion euros in 2025 and a planned 30.3 billion euros in 2026, interest costs are anticipated to climb to 42.7 billion euros in 2027, more than doubling to 78.7 billion euros by 2030.
These increased expenditures will be supported by rising revenues and increased borrowing. Revenues are expected to increase from 494.9 billion euros in 2025 to 524.5 billion euros in 2026, and 543.3 billion euros in 2027. The financial plan projects 586.9 billion euros for 2028, 588.9 billion euros for 2029, and 625.1 billion euros for 2030.
Simultaneously, the federal government plans a sharp acceleration in net borrowing. While net borrowing was 66.9 billion euros in 2025, it is projected to hit 98 billion euros in 2026, 110.8 billion euros in 2027, 134.9 billion euros in 2028, and 137.1 billion euros in 2029. For 2030, the Ministry of Finance anticipates a net borrowing figure of 152.7 billion euros, more than double the amount of the previous year.
The core policy focus of the government, according to the Ministry of Finance, is expected to remain constant: investments aimed at fostering greater growth, executing structural reforms to enhance competitiveness, and undertaking overall budgetary consolidation.
The timeline for the 2027 budget involves a cabinet decision on July 6, followed by the first reading in the Bundestag between September 7 and 11. The Bundesrat is scheduled for the first pass on September 25, with a cleanup session on November 12, and the second budget week taking place from November 23 to 27. Finally, the budget is expected to receive its final approval from the Bundesrat on December 18.
