Budget Approved: 2025 Federal Budget is Delayed and Passed by the German Parliament (Bundestag) - Budget approved with delay: Germany's Bundestag passes the 2025 spending plan
German Government Approves 2025 Budget with €502.5 Billion Expenditure
The German Bundestag has approved the 2025 budget, nine months into the year, following early elections. The budget, which provides for an increase of around €25 billion from the previous year, includes a special fund of €500 billion for investments in infrastructure and climate change protection.
The vote resulted in 324 votes in favour and 269 against, with the coalition factions CDU/CSU and SPD supporting the budget. The 2025 budget includes additional debt for military and infrastructure, with expenditures primarily allocated to the climate change and transformation fund, as well as investments in transport infrastructure, including rail.
The deficit for the 2025 budget is €81.8 billion, a significant increase from the previous year. This deficit is higher than during the Corona pandemic in 2021, when it reached €215.4 billion. The provisional budget management that restricts the government's scope will no longer apply.
Due to the delay, the 2025 budget will only be valid for around three months after the planned consideration by the Bundesrat next Friday. The Bundestag has already approved a budget for around three months, and the Bundestag will be dealing with the draft budget for 2026 next week, with plans to pass it before the end of the year.
Expenditures for defence, civil and population protection, intelligence services, and aid to states illegally attacked are now exempt from debt rules if they exceed one percent of GDP. The budget allocates a record sum of over €115 billion for investments, with €37 billion from the special infrastructure fund in 2025.
The deficit for the current year is expected to rise to €143 billion, the second-highest amount in the history of the Federal Republic. The budget supplementary law for implementing the relaxation of the budget brake in the defense and security sector has also been passed.
This budget marks a significant step forward in Germany's efforts to invest in infrastructure and climate change protection, while also addressing the country's growing deficit. The approval of the budget comes at a crucial time, as the government continues to navigate economic challenges and address the ongoing impact of the pandemic.
