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German Parliament Prepares Vote on High-Borrowing 2025 Budget to Fund Defense and Infrastructure

Eased debt brake rules allow record new borrowing of €81.8 billion next year, paving the way for a doubling of military outlays by 2029.

German Vice Chancellor and Finance Minister Lars Klingbeil leads the cabinet meeting at the chancellery in Berlin, Germany, Wednesday, June 18, 2025. (AP Photo/Markus Schreiber)
German Chancellor Friedrich Merz attends a cabinet meeting at the chancellery in Berlin, Germany, late Tuesday, June 24, 2025. (AP Photo/Ebrahim Noroozi)
German national flag flutters on top of the Reichstag building, that seats the Germany's lower house of parliament, the Bundestag, in Berlin, Germany, March 25, 2025. REUTERS/Lisi Niesner/ File Photo
German Chancellor Friedrich Merz and Finance Minister Lars Klingbeil at a cabinet meeting

Overview

  • Parliament will vote June 24 on the 2025 draft budget after national elections delayed approval and nearly six months under a provisional funding arrangement.
  • The plan foresees net borrowing of €81.8 billion in 2025 rising to €126.1 billion by 2029 and totals approximately €847 billion in debt over the legislative period.
  • A law passed in March relaxed Germany’s debt brake, creating special funds including a €500 billion infrastructure pool alongside new military spending reserves.
  • Defense outlays are set to more than double to €152.8 billion by 2029, reaching 3.5 percent of GDP and meeting the updated NATO target six years ahead of schedule.
  • The budget breaks with years of austerity to channel unprecedented investment into roads, railways, hospitals and broader economic stimulus.