German chancellor Olaf Scholz. Photo: Reuters
The German government is working on a draft budget for 2027 which includes total borrowing of €196.5bn as it aims to bolster infrastructure and defence, sources told Reuters. This compares with €50.5bn in 2024 under the previous government, before Europe’s biggest economy threw off decades of fiscal conservatism last year in a bid to revive growth, modernise crumbling infrastructure and scale up military spending.
The budget also features a strong commitment to defence spending, which is set to climb to €105.8bn in 2027 from €82.7bn in 2026 in the core budget, the sources said.