Overview
- The Bundesrechnungshof delivered a report to the Bundestag budget committee on September 3 that says the roughly €7 billion labelled as a 'Rücklage' is not backed by cash and functions as additional borrowing when used to balance the 2027 budget.
- The government’s 2027 draft shows €118.7 billion of net borrowing in the core budget and more than €200 billion of new debt when off‑budget special funds for defence and infrastructure are included.
- The auditor warns that following the government’s finance plan could push federal debt toward about €3 trillion within ten years and raise the share of the budget spent on interest sharply, creating risk of market confidence loss.
- The Bundesrechnungshof says using the empty reserve may lack the required credit authorization and poses a constitutional risk, while the Finance Ministry defends the move as lawful practice and cites court precedent on forming and dissolving reserves.
- Parliamentary budget talks start next week and will pit pressure for immediate consolidation against calls to protect investments and vulnerable groups, with subnational cases such as Berlin already cutting planned investment spending to close gaps.