Germany Boosts Defence and Investment Spending in 2027 Budget

Germany's cabinet has approved the 2027 budget draft, significantly increasing investment and defense spending to counteract economic challenges. The budget outlines a total spending of €555.4 billion and borrowing of €203.6 billion with a focus on boosting defense expenditures, aiming to raise defense spending to 3.5% of GDP by 2029.

Germany's cabinet has taken a significant step forward, approving the 2027 draft budget on Monday. This budget aims to revitalize the nation's sluggish economy by enhancing investment and defense spending, countering the adverse effects of war-related energy disruptions and chronic underfunding.

The 2027 financial plan, with a total expenditure of €555.4 billion and borrowing set at €203.6 billion, reflects a comprehensive approach to economic challenges. The government plans €118.7 billion borrowing within the core budget, along with additional funds from infrastructure and special defense initiatives.

A notable aspect of the budget is the increase in defense allocation from €82.2 billion in 2026 to €109.0 billion in 2027, culminating at €130.1 billion including external support. Discussions in parliament are scheduled for September, with final approval expected by the end of the year.