The German Bundestag has approved the federal budget for 2026, totaling €524 billion. On Friday, 322 members of parliament voted in favor of the final version of the spending plan put forward by the black-red coalition, while 252 voted against it. There were no abstentions. The newly adopted budget law establishes the financial framework for all federal expenditures in the coming year.
With €524.5 billion in total spending, the federal budget rises by €21.5 billion compared to the previous year. However, revenues fall significantly short of expenditures: the government plans to take on €97.97 billion in new loans next year.
When combined with debt-financed special funds for infrastructure, climate neutrality, and the armed forces, new borrowing for 2026 will exceed €180 billion. Over the course of the current legislative period from 2025 to 2029, total new debt will amount to roughly €850 billion. This is made possible through a series of exemptions to the national debt brake, which is intended to curb excessive borrowing.
The largest share of the budget is allocated to the Ministry of Labour and Social Affairs, which receives €197.34 billion. The bulk of this, €128 billion, is dedicated to pensions. Minister Bärbel Bas (SPD) defended the size of her ministry’s budget on Friday morning, emphasizing that 99 percent of expenditures are “statutorily mandated compulsory spending.” Referring to the country’s social welfare system, Bas said it provides “security to a very, very large number of people in the country” and added, “Our welfare state ensures stability and social peace.”
The second-largest budget is the defense portfolio at €82.69 billion, representing the biggest increase. In the current year, Defense Minister Boris Pistorius (SPD) has €62.3 billion at his disposal. Including funds from the Bundeswehr special fund, next year’s defense budget will total more than €108 billion. The third-largest allocation is for the Transport Ministry, with €27.9 billion.
This marks the second time the Bundestag has passed a federal budget this year. Due to the change in government, the budget for the current year was only approved in September. The previous coalition of the SPD, Greens, and FDP collapsed more than a year ago during negotiations over the 2025 budget.
Finance Minister Lars Klingbeil (SPD) warned on Tuesday of challenges beginning in 2027, when he expects a funding gap of more than €30 billion. “The biggest tasks still lie ahead of us,” Klingbeil said, describing the approval of the 2025 and 2026 budgets as “a kind of warm-up for us as a parliament.”
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