Overview

• Lawmakers passed a €502.5 billion 2025 federal budget with votes from the Union and SPD and also enacted a constitutionally anchored €500 billion special fund for infrastructure and climate; the roll-call vote was 324 to 269.
• Net borrowing for 2025 is €81.8 billion, and total new debt exceeds €140 billion once additional defence and infrastructure credits are included, enabled by a defence-area exception to the debt brake and the off-budget special fund.
• The government’s 2026 draft sets €520.5 billion in outlays and €89.9 billion in net borrowing, with the defence budget rising by €20.3 billion to €82.7 billion and transport set to draw an extra €21.25 billion for infrastructure from the special fund.
• The Bundesrechnungshof told Parliament that nearly one in three euros of federal spending is credit-financed and cautioned that rising interest costs pose long-term risks, while the financial plan shows gaps of €34.3 billion in 2027 and €64–74 billion in 2028–2029.
• Parliament begins first readings of the 2026 Einzelpläne next week, including proposals that keep the foreign office roughly stable, lift health and interior spending, and shift major transport investments to the special fund, as critics such as former finance minister Christian Lindner question the debt build-up.