According to reports appearing in several media outlets this Tuesday, the federal government is planning to introduce a charge on sugar-sweetened beverages starting in 2028. The Federal Ministry of Finance suggests that this levy could generate an annual revenue of approximately 450 million euros, which would reportedly be allocated specifically to the statutory health insurance fund, rather than entering the general federal budget. Meanwhile, it is also reported that taxes on alcohol and tobacco are expected to increase.
Regarding the overall federal budget, government sources indicate that the projected figures for 2027 are 543.3 billion euros, rising to 586.9 billion in 2028, 588.9 billion in 2029, and 625.1 billion in 2030.
A significant driver in these expenditures is the defense sector. The spending in 2027 is anticipated to reach 105.8 billion euros, representing a substantial increase of about 75 percent compared to the previous year, 2025. Looking ahead, the preliminary figures to be voted on by the cabinet on Wednesday calculate defense expenditures at 149.9 billion euros in 2028, 158.9 billion euros in 2029, and 179.9 billion euros in 2030. Factoring out these defense costs, the remaining budget in 2030 would therefore only be slightly more (by about 2 percent) than in 2025.
Adding to this financial pressure are sharply escalating interest expenses. These costs are projected to rise from 29.9 billion euros in 2025 and an estimated 30.3 billion euros in 2026, to 42.7 billion euros in 2027. They are also expected to more than double by 2030, reaching 78.7 billion euros.
These extensive expenditures are supposedly made possible by rising federal revenue. While the federal budget received 494.9 billion euros in 2025, projections for 2026 and 2027 stand at 524.5 billion and 543.3 billion euros, respectively. For the period 2028 to 2030, the budgeted revenues are set at 586.9 billion euros, 588.9 billion euros, and 625.1 billion euros.
Conversely, the federal government also anticipates a sharp increase in the net borrowing requirement. Net borrowing was 66.9 billion euros in 2025, but is estimated to reach 98 billion euros in 2026, 110.8 billion euros in 2027, 134.9 billion euros in 2028, and potentially 137.1 billion euros in 2029. The Finance Ministry projects a net borrowing of 152.7 billion euros for 2030-significantly more than double the amount required in the preceding year of 2025.
The government’s reported policy priorities for the budget largely remain unchanged: investments aimed at fostering growth, structural reforms to increase competitiveness, and general budget consolidation, as articulated by the Ministry of Finance on Tuesday.
The legislative timeline for the 2027 budget specifies a cabinet resolution on July 6, followed by the first reading in the Bundestag from September 7 to 11. The Federal Council (Bundesrat) is scheduled for the first passage on September 25, a final cleanup session on November 12, and the second budget week in the Bundestag from November 23 to 27. The budget is then slated for final approval by the Bundesrat on December 18.
