German parliament, Bundestag, approves budget plan for the year 2025.
German Bundestag Approves 2025 Budget with Increased Defense Spending
The German Bundestag has approved the federal budget for 2025, allocating funds for various sectors including defense, labor, and social affairs. The budget, proposed by Federal Minister of Finance Lars Klingbeil (SPD), has expenditures of 502.5 billion euros, an increase of around 25 billion euros from the previous year.
With an additional 24 billion euros from the Bundeswehr special fund, a total of over 86 billion euros is now available for defense. This increase will boost the defense budget to more than 62 billion euros. The special fund, with a term of twelve years, will be used for investments in infrastructure, energy, digitalization, hospitals, research and development, sports facilities, construction projects, and education.
The budget allocates around 190 billion euros to the Ministry of Labor and Social Affairs, with 122.5 billion euros going to the pension insurance. This significant investment is aimed at securing the future of the German workforce and ensuring the sustainability of the pension system.
Federal Minister of Finance Lars Klingbeil expressed optimism about a positive economic turnaround following the approval of the new budget. His optimism is based on the tax relief of the "growth booster," the "corporate tax reform," the "reduction of energy prices," the "location promotion law," and a planned "infrastructure acceleration law." He also refers to forecasts by economic research institutes predicting a positive development in the economy.
However, not everyone shares Klingbeil's optimism. Green Party parliamentary group leader Katharina Dröge stated that the government had a chance to create a "moment of momentum" but instead created a "moment of disappointment." The Left Party accused the government of cynical politics and class hatred, claiming that the coalition is looking for scapegoats instead of solutions.
The opposition also accused the government of accumulating debt, not investing enough in the future, and misusing the special fund for infrastructure measures. AfD leader Alice Weidel called for social benefits for refugees to be reduced or abolished and for a return to the debt brake.
The process for drafting the 2026 budget is already underway, with the Bundestag set to debate it for the first time next week and a decision expected before the end of the year. The working group of the German Bundestag is expected to begin the debate on the budget law for the year 2026 starting Tuesday, September 16, 2025, from 10:00 AM in the 23rd session and continue the discussion in the following sessions on September 17 and 18, 2025.
Federal Chancellor Friedrich Merz (CDU) did not defend the budget but discussed topics such as foreign policy, energy policy, citizen's income, pension system, or migration policy during the general debate on Wednesday. The multi-day debate on the federal budget began on Tuesday and included discussions on individual budgets of various ministries.
The approved budget only applies for three more months due to the delay in its passage caused by the collapse of the traffic light coalition and the subsequent change of government. A provisional budget has been in effect until now, which will end with the implementation of the new budget plan.
In conclusion, the German Bundestag has approved the budget for 2025, allocating funds for various sectors. While the budget has received criticism from the opposition, the government remains optimistic about the positive impact it will have on the economy and the future of the German people. The process for drafting the 2026 budget is already underway, with the Bundestag set to debate it in the coming weeks.
