The German government plans to spend €555,4 billion in 2027, more than €30 billion more than this year. New borrowing is projected to reach €118,7 billion in 2027, compared to €98 billion this year. (Photo: © Igor Daniel/123RF.com)
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July 2026
The German Federal Cabinet has approved the draft federal budget for next year and the financial plan up to 2030. The German Confederation of Skilled Crafts (ZDH) argues that ever-increasing debt, unclear promises of savings, and the hope for future tax revenue increases are not a basis for sound fiscal policy.
The Federal Cabinet has approved the draft federal budget for the coming year and the financial plan until 2030. Federal government The government plans to spend €555,4 billion in 2027, a good €30 billion more than this year. New borrowing is projected to reach €118,7 billion in 2027, compared to €98 billion this year. This figure does not include the new loans for the special fund for defense and climate protection. Including these loans, new borrowing will amount to approximately €200 billion next year and rise to over €219 billion by 2030.
The German government is planning record-level investments for 2027. More than €117 billion will be allocated to infrastructure, including funds from a special fund. The defense budget will rise to nearly €110 billion. "We want Germany to be a strong and crisis-proof country," says Finance Minister Lars Klingbeil (SPD). "We want to put our country back on a growth path and create the jobs of the future in Germany. We are investing in future viability and innovation, as well as in security and resilience. We are doing everything we can to ensure that we continue to live safely in Germany and that our children grow up in safety."
At the same time, it is his duty as Finance Minister to balance the budget. "Budget consolidation today secures our freedom tomorrow," said Klingbeil. To this end, the federal government is implementing numerous consolidation measures. These include a one percent savings target for each ministry. Savings are planned for 2027, for example, in pensions (3,0 billion euros), health insurance (1,8 billion euros), and housing and parental benefits (0,9 billion euros). To generate additional revenue, the government plans to introduce a tax on plastics and sugar, as well as increase taxes on alcohol and tobacco.
Holger Schwannecke, Secretary General of the Central Association of German Crafts The German Confederation of Skilled Crafts (ZDH) sees no basis for a sustainably sound fiscal policy in the decisions. "Those who base the federal budget on ever-increasing debt, vague promises of savings, and the hope of future tax increases are merely postponing the problems instead of solving them." This results in uncertainty for the predominantly family-run craft businesses. "Especially considering the many business successors who want to take over, the enormous new debt planned until 2030 is a major concern."
Craft policy
Craft policy
Craft policy
Interest payments exceeding €80 billion in 2030 alone would significantly restrict the financial leeway for future investments. "It is also concerning that the budget remains vague on crucial points. If cuts to financial aid are only to be determined at a later date, it gives the impression that difficult decisions are being postponed. The skilled trades sector has already made its contribution with the painful reduction of the tax credit for skilled trades services. Therefore, we expect all sectors to bear their share of the burden of budget consolidation," explains Schwannecke.
He demands reliable funding from the government. "The multi-billion-euro budget shortfalls of the coming years, dwindling reserves, rising interest payments, and the postponement of repaying the COVID-19 debt to the next legislative period make it clear that further structural reforms are indispensable. It is particularly incomprehensible that the state and public administration continues to grow in terms of personnel despite this situation. Anyone who demands austerity measures from citizens and businesses must also set priorities within their own sphere and finally implement the announced savings in concrete terms, expressed in new hires and civil service appointments."
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