The German Bundestag approved the 2026 federal budget on Friday, marking a significant shift in fiscal policy and triggering immediate debate amongst political factions. The vote, secured with a narrow majority of 322 in favor and 252 against, authorizes spending of €524.54 billion, a substantial increase of €21.54 billion compared to 2025 and exceeding the original government proposal by €4.4%.
While the government touts the budget as necessary for continued economic stability and strategic investments, critics are scrutinizing the increased spending and its potential impact on Germany’s long-term fiscal health. Notably, investments are slated at €58.35 billion, a decrease from the previous year’s figure but still representing a revision upwards from the initial government estimate. Future commitment authorizations are planned at a significant €449.91 billion, representing an even larger upward adjustment.
The approved budget also necessitates a net credit intake of €97.96 billion – approximately €8 billion higher than initially projected by the ruling coalition. This increase in borrowing, coupled with projected tax revenues of €387.21 billion (also surpassing the government’s initial estimate by €3.38 billion), has raised concerns about compliance with Germany’s constitutional debt brake.
Opposition leaders are already voicing their criticism, arguing that the budget represents a departure from responsible fiscal management and risks fueling inflation. They contend that the increased borrowing could jeopardize Germany’s credibility on the international stage and limit future flexibility in responding to unforeseen economic challenges.
Furthermore, the allocation of funds – particularly the comparatively smaller investment figure versus the overall spending increase – is drawing attention. Some analysts suggest that the government is prioritizing immediate spending needs over long-term structural investments. The debate is expected to intensify as the budget’s impact on the German economy and broader European financial stability unfolds. The long-term implications of this revised fiscal posture remain a crucial point of contention in the German political landscape.