ZDH calls for reforms with "record impact"

The German government is planning record spending in its draft budget for next year. The skilled trades sector continues to demand structural reforms. They argue that simply increasing funding will not guarantee the competitiveness of the German economy.

The German government has submitted its draft federal budget for the coming year to the Bundestag . Spending is projected to increase again in 2027 compared to the current year – by approximately six percent to €555,4 billion. In the following years, it is expected to rise to €635,4 billion by 2030. Debt is projected to increase from €98 million this year to almost €119 million in 2027. This is in addition to the borrowing for the special fund for climate protection and defense. This will raise the debt to well over €200 million – the highest it has ever been.

This will increase the federal government's interest payments to over €80 billion by 2030. Next year, they are expected to be almost €42 billion. "We want to ensure that our children and grandchildren have hope for the future again, that they have a future perspective," said Chancellor Friedrich Merz (CDU) in the Bundestag. Nevertheless, additional reforms are necessary. The burden on businesses from high energy costs and bureaucracy must be further reduced. Germany should be at the forefront of technological development in the transformation driven by artificial intelligence.

Removing shackles from economic development

"We are investing in our future, we are investing in our security, and we are creating the freedom to act tomorrow as well. This budget lays a new foundation for growth, employment, and social security," explained Finance Minister Lars Klingbeil (SPD). With the 2027 federal budget, the government is continuing its course of strengthening security and stimulating the economy. A total of almost €118 billion is available. These record investments are intended to modernize the country, secure employment, and strengthen Germany's innovative capacity.

A record budget alone won't create growth. "The additional billions can only have a record impact if Germany's structural problems and the constraints on economic development are resolved," commented Jörg Dittrich, President of the German Confederation of Skilled Crafts. "I will never tire of pointing out, especially given the immense debt of this 2027 federal budget, that the necessary improved framework for investment, innovation, and competitiveness can only be achieved through further structural reforms, certainly not simply by throwing more money at it."

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Dittrich calls for a fiscally sustainable course of action.

The federal government must link the financial leeway afforded by the high level of debt with a reform agenda that will enable renewed growth in Germany. Dittrich stated: "Increased government spending must not obscure the fact that fundamental changes are necessary in many areas. The high level of new debt is a cause for concern with regard to the next generation. Interest payments will rise to €80,7 billion by 2030." What goes toward debt servicing is not available for future investments in skilled workers, vocational training, infrastructure, and innovation.

"Entrepreneurs in the skilled trades think in terms of generations and beyond the next legislative period. We expect the same standard from fiscal policy. The federal government must now create the conditions that ensure that high levels of public spending translate into sustainable economic growth. Only with a sound fiscal policy and a competitive business environment will companies be able to reinvest, continue training apprentices, and create jobs."

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