Klingbeil Expects SPD Parliamentary Group to Approve Coalition's Reform Package

The Federal Finance Minister justified the higher new borrowing in next year's federal budget with the Bundeswehr's rearmament needs and necessary modernizations. "Dass wir Schulden machen, hat damit zu tun, dass wir unsere Bundeswehr aufrüsten, dass wir modernisieren," he said. With a view to threats from Russia, Klingbeil added: "Man kann sich gegenüber Putin nicht mit der schwarzen Null verteidigen."

According to the cabinet draft, net new borrowing of 118.7 billion euros is planned for 2027, after 98 billion euros in 2026. In addition, new debt from special funds for infrastructure, climate neutrality, and the Bundeswehr is to be added. According to information from the Finance Ministry, total new borrowing in 2027 will be just over 200 billion euros. Defense and security spending is subject to the debt brake only up to a limit of one percent of gross domestic product.

Announcement of a Tighter Austerity Course

Klingbeil also announced a tighter austerity course. From 2028 onward, there would be gaps in the billions in the financial planning. He would demand an additional two percent in savings from each minister on top of the existing one percent savings target. A gap of 34 billion euros from the previous financial planning had been successfully closed. "Wir müssen konsolidieren, da führt kein Weg dran vorbei," said Klingbeil.

The minister also defended the planned withdrawal of 6.8 billion euros from the reserve: "Dass man Rücklagen angeht, ist völlig normal." He announced that he would present a constitutionally compliant budget. Economic expectations had been dampened, among other things, by the Iran war, which was reflected "voll in den Zahlen."

Point of Contention: Sick Leave Rules

Regarding the planned tightening of sick leave rules, Klingbeil spoke out in favor of company-level or collective bargaining solutions. The reform package should not be reopened, he warned. "Ich rate aber dazu, das Paket nicht mehr aufzuschnüren." A pragmatic implementation of the regulations was necessary because a backlog of reforms had built up in Germany over many years.

One had "jetzt ein kleines Stück Weg geschafft, aber noch nicht mehr," said the SPD chairman. The agreements were "kein Grund, sich selbstzufrieden zurückzulehnen." Doing nothing and leaving the country in the status quo "wäre das Schlimmste, was man diesem Land gerade antun könnte." The status quo had built up over 20 years.

Background: The Coalition's Reform Package

Further changes to the reform package were possible during deliberations in the Bundestag, "das eine oder andere" would still change, said Klingbeil. The cabinet wants to adopt the government draft for the 2027 federal budget on Monday. The dpa-AFX report was broadcast on July 5, 2026 on the Deutschlandfunk program.

With the reform package, the black-red coalition is responding to a number of pressing problems, including economic weakness, the energy transition, and the security policy situation. The SPD had recently repeatedly emphasized that the approval of its own faction for the decisions should not be taken as a foregone conclusion. Klingbeil nevertheless expressed confidence that the members of parliament would ultimately approve the project.