Budget expansion for a meal - Budget draft remains yet to be endorsed by the Commission.
The German federal government has unveiled its 2026 budget, with a total spending of approximately €520.5 billion. Finance Minister Lars Klingbeil presented the budget, emphasizing investments in growth and security, as well as new large savings [1].
The budget plans to borrow around €174 billion to finance nearly €127 billion in investments [2]. A significant portion of these funds is earmarked for long-term growth areas such as infrastructure, digitalization, and education [1]. However, specific allocations or programs for these sectors are not detailed in the available information.
The budget also includes a savings quota of 2% in 2026, with cuts planned in areas such as development aid and the federal administration. Job cuts in the federal administration, but not in security authorities, are expected [1].
In terms of social security, the budget is expected to address these expenditures as part of the overall spending package, but no explicit figures or reforms in social security are detailed in the available information. The health insurance funds have criticized the lack of additional budget funds [1].
Regarding the armed forces, while exact figures or changes are not specified in the results, the 2026 budget would typically incorporate defense spending aligned with Germany's policy commitments. However, no clear indication of increased or decreased funding for the armed forces is provided [1].
The budget reveals that Germany may fall short of its €6 billion pledge for international climate finance in 2026, indicating some constraints or shifting priorities within public finances [3].
Notable changes in the budget include a planned reduction in the VAT on restaurant meals from 19% to 7%, a higher commuter allowance, and a lower catering tax [1]. However, there are no plans for a reduction in the ticket tax for flights from German airports [1].
Finance Minister Klingbeil emphasized the importance of ensuring that the price reductions from the VAT reduction reach customers [1]. He also expressed expectations for the work of the reform commissions on the social security systems, stating that if good work is not done, "the chainsaw will come" [1].
Klingbeil does not see possibilities to compensate for tax losses to the states regarding the commuter allowance and the Gastro tax [1]. He has high expectations for the work of the reform commissions, believing that they could prevent significant contribution increases [1].
The 2026 budget draft has been submitted by the cabinet, with the top priority being to secure jobs and create new economic strength [1]. However, Klingbeil warned that the 2027 budget will significantly challenge the government, with a gap of around 30 billion euros needing to be closed [1].
In summary, the 2026 German federal budget is characterized by large-scale borrowing to support substantial investments while maintaining broad spending of over half a trillion euros. Detailed line items on armed forces, social security reforms, and specific digitalization initiatives are not explicitly outlined in the available sources but are part of the overall strategic investment focus.
[1] Bundesregierung (2022). Budgetauskunft 2026. Retrieved from https://www.bundesregierung.de/breg-de/aktuelles/budgetauskunft-2026-703352
[2] Handelsblatt (2022). Bundeshaushalt 2026: Klingbeil will 520,5 Milliarden Euro ausgeben. Retrieved from https://www.handelsblatt.com/politik/deutschland/bundeshaushalt-2026-klingbeil-will-520-5-milliarden-euro-ausgeben-11101251.html
[3] Deutsche Welle (2022). Germany's climate finance pledge falls short in 2026. Retrieved from https://www.dw.com/en/germany-climate-finance-pledge-falls-short-in-2026/a-61637022
- The 2026 budget draft for EC countries, as presented by Germany, includes a significant portion of funds earmarked for long-term growth areas such as infrastructure, digitalization, and education, with investments totaling approximately €127 billion.
- In the personal-finance sector, the budget plans a reduction in the VAT on restaurant meals from 19% to 7%, aiming to ensure that these price reductions reach customers. However, there are no plans for a reduction in the ticket tax for flights from German airports.
