Overview
- The Bundestag Haushaltsausschuss provisionally approved a 2027 federal budget early Friday that sets spending at about €560.9 billion and plans a net new borrowing figure of roughly €122.97 billion.
- Negotiators relied on credit‑financed Sondervermögen, special funds treated outside the debt brake, which together with defence and infrastructure loans push total new debt likely above €200 billion.
- Chancellor Friedrich Merz’s flagship proposal to cut the electricity tax for all remains unfunded and unresolved, with the coalition saying the Koalitionsausschuss will try to find financing before the Bundestag votes on 24–27 November.
- The overnight Bereinigungssitzung yielded concessions that softened social cuts, scrapped the planned plastic tax, and delayed a sugar tax until 2028, but it also exposed sharp intra‑coalition tensions and heavy criticism from opposition parties and business groups.
- Public polling shows a majority opposes very high new borrowing and prefers savings to close gaps, while the Wirtschaftsweisen warn of a structural financing shortfall of roughly €175–300 billion by 2040, raising the risk of higher interest costs and future tax increases or spending cuts.