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German cabinet backs 2027 budget with defence boost, higher debt and climate fund cuts
The German cabinet approved the draft 2027 federal budget, setting total expenditures at €555.4 billion. Core borrowing for the year is €118.7 billion, bringing total new debt above €200 billion and projected to rise to €219.5 billion by 2030.
Defence spending rises by about one‑third to €109 billion, with additional €30 billion drawn from a special defence fund. Finance Minister Lars Klingbeil argued that a balanced‑budget policy cannot protect Germany against Russian aggression.
Revenue measures include a €2.7 billion transfer from the Climate‑and‑Transformation Fund to the core budget, a new plastic levy of €1.4 billion, and higher taxes on alcohol, tobacco and a new sugar tax. Cuts are planned for the climate fund, pension subsidies and social‑security contributions, while €11.6 billion is earmarked for aid to Ukraine.
The budget also addresses the economic impact of the Iran‑Russia war, citing higher energy prices and slower growth, and calls for further consolidation of public finances through additional savings and use of reserve funds.