Overview
- Germany’s federal audit office projects that from 2029 the budget will no longer cover core state tasks, a finding highlighted by Council of Economic Experts chair Monika Schnitzer.
- Schnitzer expects only modest growth of about 0.8% to 1.3% in 2026 driven largely by public investment and cautions that the government may need to reverse measures or consider tax increases to close future gaps.
- She urges faster planning and permitting and insists special funds be used for genuine investment rather than shifting existing expenditures off the core budget.
- The governing partners remain divided on timing and financing of relief: the Union seeks to bring forward corporate tax cuts, while the SPD demands counter‑financing and resists proposed social‑sector cuts and broader working‑time changes.
- Recent data and business feedback underscore structural strains, with industrial job losses, near 3 million unemployed, export stagnation, a 2025 insolvency record, and calls from firms for stability, less bureaucracy and clearer implementation of the 500‑billion‑euro investment plans.