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Germany Expands Borrowing: Hesse Approves €1.1 Billion Debt as Coalition Backs €1.7 Billion Care Loan

Both steps use newly relaxed debt limits, drawing warnings over legality.

Overview

  • The CDUSPD majority in the Hessian Landtag approved a 2025 supplementary budget enabling about €1.115 billion in additional borrowing under the eased debt brake.
  • The plan directs €500 million to rebuild state reserves, €300 million in immediate municipal aid, €200 million for Frankfurt University Hospital, and €20 million for teachers.
  • Municipalities will receive allocation letters on Friday, with payments possible once the law is formally published, according to Finance Minister Alexander Lorz.
  • Lawmakers also set municipal transfers at roughly €7.4 billion for 2026 and €7.5 billion for 2027, as opposition parties warned debt-funded reserves could violate fiscal rules.
  • In the Bundestag’s budget clean-up session, the coalition endorsed an extra €1.7 billion loan for the nursing care insurance on top of €1.5 billion planned to keep contributions stable, drawing Green criticism of a last-minute rush; the delayed meeting also outlined shifts including €3 billion more for Ukraine, €3.6 billion less for munitions, €7.8 billion in Tennet authorizations, and €475 million more for roads, with final votes due late November.