Draft budget in the Bundestag | Budget 2027: record debt and social cuts

Shorten, but fairly: This is what the Vice Chancellor promised on Monday in the Bundestag. Photo: dpa/Kay Nietfeld The federal government wants to spend a good 555 billion euros in 2027, which is slightly more than this year, at least within the core budget. Within this core budget alone, new loans amounting to almost 119 billion euros are to be taken out. There are also additional debts for infrastructure and climate neutrality as well as for the Bundeswehr, called special funds. Overall, new debt in 2027 is expected to be a good 200 billion euros.

Finance Minister Lars Klingbeil defended these plans in the Bundestag on Monday. The coalition had to make “painful compromises” and cut financial aid and subsidies, said the SPD leader in the first session of parliament after the summer break. This is the only way to create scope to invest “in the future”. The fact that the federal government's investment policy and reforms are having an impact can be seen in the economy, which is growing faster again.

»The world will remain jerky. This will not change in the coming years. But I would like us as a country to become a little bit more free from this,” said Klingbeil. "My vision is a Germany of the future that is sovereign and crisis-proof, a strong country that is innovative and also social." Every change must be fair. We should not allow “a systematic dismantling of our welfare state to be carried out under the slogan of reform,” emphasized the SPD leader. The leadership of the coalition also agrees on this. 

"If we want to regain trust for the necessary changes, then the question of the justice of the changes must be the focus."

Two days after the AfD's election victory in Saxony-Anhalt, the Vice Chancellor also admitted that the government had lost trust. "If we want to regain trust for the necessary changes, then the question of the justice of the changes must be the focus," he said. That must be the benchmark for all decisions. If the federal government takes the right steps, "the belief that we can take our future into our own hands will come back," he said.

The burden will therefore be relieved for those who need it most: families and people with low and middle incomes. However, the federal government's reform packages actually provide for numerous cuts for low-income earners, including in the maintenance advance for single parents, in the immediate child allowance for people with low incomes, in benefits for caring relatives and in housing benefit. A few weeks ago, the Bavarian Joint Association calculated what this means for a single mother of two children who also cares for her mother and works 25 hours a week. As a result of the planned cuts, she would lose more than 1,000 euros per month as well as additional pension points that were previously credited for caring for relatives.

Meanwhile, Klingbeil also defended the high loans for the military. "Defending yourself without new debt is like going to the moon without a rocket," he said. If so much new debt were incurred, it would also have to be beneficial - jobs and innovations would have to be created in Germany.

The planned cuts to the Climate and Transformation Fund (KTF) could still be stopped by the black-red majority in the Bundestag. This was announced by the environmental policy spokesman for the Union faction, Mark Helfrich. During the budget discussions, the CDU MP referred to the climate protection measures that are financed through the fund. “So that this can continue to be fully possible, we as environmental and climate politicians firmly reject a withdrawal of 2.7 billion euros from the KTF for budget consolidation,” emphasized Helfrich. “This is about nothing less than the credibility of our climate policy.”

»There will be cuts in the social sector, but in the future every third euro will go to armaments. This is a ‘guns instead of butter’ policy.”

According to the government draft for the 2027 federal budget, some of the revenue from emissions trading that has previously flowed into the KTF should be used for the core budget. This is about the sum mentioned by Helfrich. The fund finances various funding programs - for example for switching to electric cars or new heating systems. Against this background, Environment Minister Carsten Schneider (SPD) expressed his wish for the Bundestag to provide more money to promote electromobility than provided for in the draft budget.

The Left co-chairwoman Ines Schwerdtner sharply criticized the draft budget. »Klingbeil presents a budget of social coldness. No wonder the federal government is so unpopular. There will be cuts in the social sector, but in the future every third euro will go to armaments. This is a 'guns instead of butter' policy." It is "completely absurd that, in addition to special spending on armaments, ever larger parts of the core budget are being eaten up by the military."

Now of all times, “cutting the federal subsidies for pension and health insurance funds, but also for housing and parental allowances, is politically fatal and causes even more uncertainty among people,” warned Schwerdtner, who is also the budget policy spokeswoman for the Left in the Bundestag.

The politician further complained that funds from the KTF “should be used again to plug budget holes instead of making urgently needed investments.” The Greens also criticized this before the consultations began.

In the afternoon, an alliance of 16 development and aid organizations handed over a package with 95,000 signatures against the cuts in development cooperation and humanitarian aid in the 2027 budget to SPD parliamentary group leader Matthias Miersch and Union parliamentary group vice-president Klaus Mack (CDU).

The Bundestag will discuss Klingbeil's draft in its first reading this week until Friday. Parliament is expected to decide on it in December.

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