Overview
- The federal government has introduced the 2027 budget that puts 109.7 billion euros in the core defence budget plus roughly 30 billion euros from an expiring special fund, giving the Bundeswehr about 140 billion euros for the year.
- Finance Minister Lars Klingbeil says Germany cannot afford to rebuild defence capacity without new debt and the budget shows effective new federal borrowing of 203.6 billion euros for 2027.
- The budget relies on the March 2025 Article 115(2) area exception that legally allows security-related spending above the normal debt limit to be financed with credit, creating an 85.4 billion euro carve-out for 2027.
- Parliamentary debate has focused on cuts to programs such as Elterngeld, Wohngeld, Kinderzuschlag and development aid, price markups from suppliers and whether procurement will prioritize heavy conventional systems or drones and AI.
- Economic institutes and the federal audit office warn that prior special-fund borrowing masked regular spending and that rising interest costs could roughly double federal interest payments by 2030, narrowing future fiscal flexibility; the budget is expected to be finalized by late November.