Allocated Spending Plan for Three Months: 2025 Federal Financing Plan
Germany's 2025 Budget: A Closer Look
Germany's 2025 federal budget, ready for a final vote in parliament, is causing a stir due to its expansive fiscal policy and the early federal election. The budget, which is planned at around 502.5 billion euros, includes new loans of almost 82 billion euros in the core budget.
Despite the relaxation of the debt brake for infrastructure expenditures and all credit room in defense policy, the 2025 budget is expected to incur debts of more than 140 billion euros, not including loans from special funds for the military and infrastructure. This is a significant increase from previous years, with the estimated budget deficit ratio for the year 2027 expected to rise to 3.5 percent of GDP, up from the current 2.0 percent.
Union budget spokesman Christian Haase described the 2025 budget as creating the basis for security and growth. However, party leaders Olaf Scholz (SPD) and Friedrich Merz (CDU) have acknowledged the need to explain to the population why there is a significant need for consolidation in the public budgets despite high investments in defense and infrastructure.
SPD leader Lars Klingbeil stated that the 2025 budget and the 2026 budget have no major financing gaps. He also mentioned that the reconciliation session of the Budget Committee, considered a crucial stage on the way to the approval of the 2025 budget in parliament, is expected to be the shortest on record.
Chancellor Friedrich Merz, on the other hand, has expressed concerns about the budgets for 2027 and following years. He stated that the social state as it exists today is no longer financially viable with current economic achievements. SPD leader Barbara Bas countered Merz's statement, calling it "bullshit."
The 2026 federal budget, like the 2025 budget, is intended to be decided before the end of the year. The 2026 budget plans are yet to be announced, but the 2027 federal budget will be submitted to the Bundestag immediately after the 2025 budget is decided. In the budget plans for 2027, there is a gap of 30 billion euros.
The Bundestag will make a final decision on the 2025 budget in the session week from September 16 to 19. The approval of the budget is a crucial step towards the formation of the government and the implementation of the planned policies for the coming years.
