Overview
- Lawmakers move to finalize a roughly €520 billion 2026 federal budget on Thursday, relying on about €174 billion in new borrowing through relaxed debt rules and special funds.
- An IW analysis contends that between one quarter and one half of the €500 billion twelve‑year Sondervermögen finances non‑additional spending, a claim that fuels concerns over fiscal relabeling.
- Fiscal watchdogs, including the taxpayers’ association, accuse the government of debt shifting and warn of mounting interest burdens, with FAZ reporting debt service could exceed €60 billion by 2029.
- Parliament held an expert hearing on the pension package estimated at around €200 billion, with unions backing benefit stability and employers calling it the costliest social law of the century.
- Pressure on Berlin is compounded by state finances: Hesse plans €1.115 billion in extra 2025 loans largely for reserves, and Bavaria’s cabinet is weighing new debt despite a long no‑borrowing stance.