Finances: Klingbeils plans: two households, 170 billion debts

The traffic light coalition broke the dispute over a few billion euros in the federal budget a few months ago. Finance Minister Lars Klingbeil has now set up this budget without a larger government. He focuses on defense and investments in the infrastructure, all without major financing gaps, as can be seen from the plans available to the German Press Agency. The fact that all of this is so silent is probably less due to the negotiating skills of the new Vice Chancellor.

In contrast to the traffic light coalition, Klingbeil can take out many billion euros in loans – and he also uses that. In this and next year, the SPD politician is planning new debts with a total of 170 billion euros. If there were still loans of 33.3 billion in 2024, there should be much more than twice as much this year: 81.8 billion – and then 89.3 billion in 2026.

This is made possible because the black and red alliance of Chancellor Friedrich Merz (CDU) provided for a loosening of the debt brake and a 500 billion euro special pot for infrastructure renovation before the Chancellor election.

Two households within a few months

It was a cold start for Klingbeil. For less than two months in office, he has already had to present two households: first the one for the current year that the traffic light was no longer ready. Since the beginning of the year, the ministries have to limit themselves to the most important. Work on the budget for 2026 is running in parallel, which is also to be launched before the summer break in July.

The conversations with his ministerial colleagues conducted Klingbeil differently than his predecessor Christian Lindner alone, without a chancellor at the table. They should hardly have been pleasant, because almost all projects in the coalition agreement are under financing reservation – and of course every ministry considers its projects to be important. It is said that the wishes of the new ministers registered in financial planning by 2029 would have blown plans for around 50 billion euros. The Vice Chancellor “turned away” and handled his colleagues.

The budget design for this year and the first plans for 2026 are to be decided in the cabinet this Tuesday. This year Klingbeil wants to spend 503 billion euros, about six percent more than last year. In 2026, the budget will then increase to 519.5 billion euros.

Defense and armor

For the Bundeswehr, population protection, intelligence services and help for states such as Ukraine contrary to international law, 75 billion euros are planned this year. Without the loosening of the debt brake, it would have been difficult to finance. However, the change in the Basic Law enables Germany to put a lot of money into these areas theoretically indefinitely. According to calculations by the Ministry of Finance, 32.1 billion are now being financed by new loans.

Overall, Klingbeil’s draft achieves a NATO rate of 2.4 percent of gross domestic product for this year – and thus fulfills the specification of two percent. In the coming years, expenses should increase gradually, up to 3.5 percent in 2029. This takes into account the vice-chancellor in his plans, which is expected to be decided this week at the NATO summit: the Allies want to start at least 3.5 percent of GDP and also invest in militarily usable infrastructure, so that a total of 5 percent.

In his own party, however, the SPD leader has to be prepared for a larger debate. Because prominent social democrats have just called for a departure policy and have spoken out against the deployment of new American medium -range missiles in Germany and against increasing the defense budget.

Second focus in the federal budget of the next few years is the renovation of the dilapidated infrastructure – and this is associated with hope for more economic growth. “It is important to us that this country will be powerful again,” says the Ministry of Finance. “It has to be over with the phase of the chapout savings.”

A total of around 115.7 billion euros are to be invested this year, 123.6 billion in the coming year. This is also made possible by the new federal debt – in this case by a special fund, for which the debt brake does not apply and which is to be fed up to 500 billion euros with loans.

The money should flow over twelve years. This year Klingbeil plans to skim 37.2 billion euros from the special pot, 57.9 billion in the coming year. Above all, the repair of bridges, streets and energy networks should be paid for, but money should also flow into digitization, hospitals and housing construction. Parts of the money manage the countries, parts also flow into a pot for climate protection investments.

In the budget negotiations of the traffic lights government, “need for action” was a winged word that was to rewrite financing gaps. The Ministry of Finance does not speak of this for 2025 and 2026. Only a so -called global minor edition is planned. It is expected that the ministries will not spend four billion of their funds this year, eight billion next year. This is considered realistic.

On the other hand, the budgets from 2027 to 2029 are likely to be more problematic. Because then, among other things, loans that the federal government recorded in corona pandemic must be repaid. In addition, the loan scope drops if the economy recovers as planned.

The cabinet should bring both households on the way this Tuesday. The budget for 2025 should be done quickly: he should be advised in the Bundestag for the first time before the summer break in mid -July. The decision is planned for mid -September. The household for 2026 is not quite as hurry: Here the cabinet only decides on cornerstones, the exact plan is to be advised on July 30th. If everything goes smoothly, the Bundestag could decide on budget 2026 in mid -December.