The German government plans to increase debt financing, investment and bring defense spending to more than 3% of GDP. It is also planned to allocate 11.6 billion euros of assistance to Ukraine in 2027.
The German government approved the key indicators of the federal budget for 2027, focusing on increasing spending on defense, infrastructure and economic development.
It is reported by Reuters, informs the portal PromPolitInform.
The corresponding decision was made on April 29 as part of the medium-term financial plan until 2029.
The total spending in the draft budget will amount to 543.3 billion euros, which is 3.6% more than a year earlier. The volume of new borrowings will reach 196.5 billion euros, which is significantly higher than in previous years. For comparison, in 2024 this figure was 50.5 billion euros.
Focus on defense
Defense spending in the base budget will rise to 105.8 billion euros in 2027 against 82.7 billion in 2026. Taking into account special funds and assistance to Ukraine, total defense spending will reach 144.9 billion euros.
As a result, this will amount to about 3.1% of Germany’s GDP in 2027, which corresponds to the obligations to NATO. By 2030, this figure could grow to 3.7% of GDP.
Chancellor Friedrich Merz said that the events of the last year, in particular the situation in the Middle East, emphasize the need to strengthen defense capabilities.
Support for Ukraine
Germany plans to allocate 11.6 billion euros of assistance to Ukraine in 2027. In 2028-2030, funding will amount to 8.5 billion euros annually.
Finance Minister Lars Klingbeil noted that the amount of support can be adjusted depending on the needs of Ukraine. He also recalled the loan approved by the EU countries for Ukraine in the amount of 90 billion euros, which Hungary had previously blocked.
Investment and economic development
The total investment in 2027 is planned at 118.5 billion euros, which is 37.6 billion more than in previous financial plans.
The funds will be directed primarily to the modernization of transport, digitalization and development of medical infrastructure. The government emphasizes that these investments should stimulate economic growth, job creation and economic recovery after years of underfunding.
Follow-up procedure
After the approval of the main parameters by the government and the preparation of the full draft budget in July, the document will be submitted to parliament in September. Final approval is expected by the end of the year.
Recall that during the visit of President of Ukraine Volodymyr Zelensky to Berlin on April 15, 10 documents were signed covering various areas of cooperation. These are: defense contracts, economy, industrial and social cooperation. Defence contracts were also awarded to Raytheon for the supply of PAC-2 missiles and to Diehl Defence for IRIS-T systems.
Photo – from open sources
