Federal Finance Minister Lars Klingbeil (SPD) has planned significantly higher levels of new debt for the coming year than previously anticipated, according to the cabinet draft for the 2027 budget, cited independently by the “Handelsblatt” and “Spiegel”.
For 2027, Klingbeil now forecasts an increase of nearly eight billion euros in additional loans within the core budget. This means his projection for core debt in the coming year stands at 118.7 billion euros, compared to the 110.8 billion euros estimated in April. Excluding funds allocated for special assets like the Bundeswehr and infrastructure investments, the total federal deficit for 2027 is projected to reach 203.7 billion euros.
Fiscal pressure is exacerbated by a notable rise in expenditures. The budgetary draft sets spending at 555.4 billion euros-a jump of 12.1 billion euros from the 543.3 billion euros budgeted in April. Critically, the government has failed to realize the complete savings it had aimed for. While previous plans called for departmental efficiency measures to yield three billion euros, led by Digital Minister Karsten Wildberger (CDU), the draft budget only reflects projected savings of 1.2 billion euros.
Due to the disparity between required funding and realized efficiency cuts, Klingbeil must now plan to tap into financial reserves for 2027. The cabinet proposal includes a withdrawal of approximately 6.8 billion euros from these reserves, leaving only 3.9 billion euros available for subsequent years.
