Germany's 2027 Budget Draft: €11.6 Billion for Ukraine and Record Borrowing Over €203 Billion

Germany plans to increase its borrowing volume in 2027 to over €203 billion, a significant rise compared to the €196.5 billion forecasted in April and €50.5 billion in 2024. This is outlined in the draft budget reviewed by Reuters. Total expenditures for 2027 will amount to €555.4 billion, including €11.6 billion for Ukraine.

The budget draft, part of a medium-term financial program until 2030, assumes the Middle East conflict will subside during the summer. It also warns of potential far-reaching consequences for the German economy if disruptions to the Strait of Hormuz or oil production facilities persist longer.

Total investments will reach €117.5 billion, almost €40 billion more than initially planned. This increase follows the approval of a €500 billion infrastructure fund and a rule change allowing defense spending to be excluded from public debt limits. Core defense spending in the main budget will rise to €109 billion in 2027 (from €82 billion in 2026), reaching €130.1 billion with funds for Ukraine and other security-related expenses.

Cabinet approval of the initial draft is expected on Monday, when the budget will be officially presented. Parliamentary discussions will begin in September, with final approval anticipated by year-end.