German draft budget foresees more than €203 billion in borrowing, document shows

The 2027 draft budget, part of a financial framework extending to 2030, allocates total spending of €555.4 billion

A general view of the last session of the Saxony-Anhalt state parliament before the September election, in Magdeburg, Germany, Jun 26, 2026. REUTERS/Fabrizio Bensch

The German draft budget for 2027 foresees borrowing of more than €203 billion ($232 billion), up from total borrowing of €196.5 billion in the key targets approved by the government in April, according to the budget draft seen by Reuters on Friday.

This compares with €50.5 billion in 2024 under the previous government, before Germany threw off decades of fiscal conservatism last year in an effort to revive its moribund economy.

The 2027 draft budget, part of a medium-term financial framework extending to 2030, allocates total spending of €555.4 billion, more than the €543.3 billion approved in April.

Total investment will be at €117.5 billion, nearly €40 billion euros more than what was originally planned. This increase comes after the approval of a €500 billion fund for infrastructure and a rule change that allows defence spending to be excluded from debt limits.

The budget features a strong commitment to defence, with core defence spending set to climb to €109.8 billion in 2027 from €82 billion in 2026 in the core budget. Adding €11.6 billion in funds for Ukraine and other security-related spending such as civil protection, intelligence and IT protection, defence spending goes up to €130.1 billion.