Germany's 2027 draft budget proposes new borrowing of more than €203 bln, above
prior expectations and materially higher than 2024. Total outlays are around
€555.4 bln, with investment lifted to €117.5 bln focused on transport,
digitalisation and hospital upgrades. The core defense budget rises to €109.8
bln; including Ukraine aid and other security spending, total defense-related
outlays reach roughly €130.1 bln. The government says it will use expanded
borrowing and special funds to accelerate infrastructure and rearmament.
draft warns prolonged disruption in the Strait of Hormuz or oil supplies would
have a significant impact on the German economy. The budget is due to be
submitted to parliament in September and is expected to be approved by year-end.
