Federal Budget 2027: Klingbeil Plans 555 Billion Euros in Spending and Over 203 Billion in New Debt

Compared to the key figures presented in April, which still provided for spending of 543.3 billion euros, the budgets have thus risen by around twelve billion euros. The planned new debt is also higher: at the end of April, 110.8 billion euros in new debt was still planned for 2027, following 98 billion euros in the 2026 budget plan.

Background: From the Key Figures to the Cabinet Draft

To finance this, Klingbeil intends, among other things, to draw on the reserve that was built up in good times up to 2019. According to the cabinet submission, a withdrawal of around 6.8 billion euros from this reserve is planned. In the following years, according to the cabinet submission, around 3.9 billion euros from the reserve would still be available.

The submission states that the Federal Employment Agency will only be able to balance its 2027 budget with federal liquidity assistance in the form of a multi-year loan. This makes clear that the Federal Employment Agency will also require additional federal funds in the coming year to cover its expenditure.

The federal government justifies the higher spending with the challenges facing the country. The draft states: „Die Herausforderungen, vor denen unser Land steht, bleiben angesichts der globalen Unsicherheiten und Krisen enorm." Given these framework conditions, a higher level of spending is necessary.

Cabinet Decision and Next Steps

The federal cabinet intends to adopt the government's draft budget for 2027 and the financial plan through 2030 on Monday. This marks the start of parliamentary deliberations in the Bundestag and Bundesrat, during which changes to the budget items are still possible.

Criticism from Environmental Associations

Criticism of the draft came from environmental associations, among others. They warned of cuts to climate protection. In a statement distributed via the dpa news channel, it said: „Das bedeutet: weniger Klimaschutz, mehr Hitze, mehr Dürre und am Ende wesentlich höhere Kosten durch die Klimakrise."

Specifically, it was criticized that funds from the Climate and Transformation Fund (KTF) are to be reallocated. „Offenbar sollen gewaltige Summen aus dem Klima- und Transformationsfonds (KTF) abgezogen werden, um andere Haushaltslöcher zu stopfen," a spokesperson said.

In addition, it was criticized that the announced consolidation contribution had not yet been substantiated in concrete terms. „Die Ministerien sollen vage Effizienzgewinne liefern, die Rücklage wird entgegen aller Zusagen geplündert, Investitionen werden künstlich hochgerechnet, und der angekündigte Konsolidierungsbeitrag bleibt bis heute eine Luftbuchung ohne konkrete Deckung." In the midst of the hot summer, the government is announcing with this budget draft that it will cut billions in climate protection, Schäfer criticized.

Reactions from the opposition and from business associations are still pending. Observers expect that the planned net new borrowing of 118.7 billion euros in the core budget will be one of the central points of contention in the upcoming Bundestag deliberations.

Outlook on the Parliamentary Deliberations

The question of whether the federal government is complying with the debt brake will also play an important role in the parliamentary process. The debt brake provides that the federal government may not take on new debt under normal circumstances; exceptions are only possible in emergencies.

The negotiations on the 2027 federal budget are therefore likely to be conducted intensively in the coming weeks. With the decision on Monday, the federal cabinet wants to give the formal starting signal for the parliamentary process.

The final amount of spending and new debt could still change in the course of the deliberations. As experience shows, the Bundestag and Bundesrat adjust individual budget items in their amendments without fundamentally overturning the overall total.

The news was broadcast on 3 July 2026 on the Deutschlandfunk program. The draft is in the possession of the ARD capital studio and was released to the public over the weekend. This makes clear in which direction the federal government intends to steer the 2027 budget.

The planned borrowing of 118.7 billion euros in the core budget significantly exceeds the figure of 98 billion euros provided for in the 2026 budget plan. This signals a shift in fiscal policy towards significantly higher spending and a significantly greater reliance on the financial markets.

Deliberations in the Bundestag are expected to begin in autumn 2026. By then, the parliamentary groups must coordinate their positions and decide on possible amendment proposals. The federal government expects the budget to be adopted by the end of the year.