What steps now follow in Parliament?

Q: What steps now follow in Parliament?

The projection is to feed into the deliberations on the 2027 budget; the Federal Council wants to present an updated financial planning by the end of the year, and supplementary credits will be dealt with in the coming sessions.

Bern, 19 August 2026 The Federal Council is correcting its budget forecast for 2026 and expects a surplus of several hundred million francs instead of the originally budgeted deficit. ## Higher Revenues and Lower Expenditures The revised figures deviate significantly from the line envisaged in the budget. Instead of a negative balance, the government is expecting a clearly positive result by mid-year, as can be seen from the projections published on Wednesday. The improvement is explained by two opposing effects: additional revenues, particularly from direct federal tax, value-added tax, and withholding tax, as well as lower expenditures in several departments. The interest burden is also developing more favorably than assumed. At the same time, the Federal Council points out that the financial situation remains tense given several major procurement projects, particularly in the armaments sector. Additional credits, for example for the army, would be requested separately and be subject to their own parliamentary review. ## Defense Credit and Debt Brake Regarding the supplementary credit for defense, the government notes that it is compatible with the Financial Budget Act. This means the act is being complied with «nach Sinn und Zweck», because the debt brake is ultimately not being violated. The wording points to the fact that the fiscal policy guardrail is interpreted strictly over a business cycle and not on an annual basis. The debt brake requires a structurally balanced budget. Viewed over several years, ordinary expenditures may not exceed structural revenues. Temporary cyclical deficits are permissible, provided they are offset again in better phases. ## Reactions from Parliament From the Federal Council's perspective, the new figures show that the consolidation that has been initiated is working. The expenditure ceiling and the repeated rounds of savings have contributed to ensuring that the Confederation remains on course despite cyclical risks. Critical voices in Parliament point out that the better revenues are mainly due to special effects and do not solve a structural problem. They continue to demand clear prioritization of the upcoming major projects, particularly investments in the army and in the digitalization of administration. A field of tension is emerging for the upcoming budget debates: On the one hand, the expected surplus opens up political leeway for targeted relief measures or investments. On the other hand, various stakeholders insist that the funds be used for debt repayment or debt reduction over the next business cycles. ## Outlook for the 2027 Budget The Federal Council wants the projection to feed into the deliberations on the 2027 budget, which will begin after the summer session. An update of the financial planning is also to be available by the end of the year. Overall, the broader fiscal policy situation therefore remains stable for the time being. The short-term all-clear does not change the fact that large expenditure items are due in the medium term and that structural discipline must continue to take priority. Observers in Bern expect Parliament to take note of the dispatch and to discuss the financial planning in depth in the responsible committees. Binding decisions on any supplementary credits are expected in the coming sessions.

Federal Council Expects Budget Surplus Instead of Deficit in 2026

Higher Revenues and Lower Expenditures

Defense Credit and Debt Brake

Reactions from Parliament

Outlook for the 2027 Budget

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