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 defence budget rises to €109.8
bln; including Ukraine aid and other security spending, total defence-related
outlays reach roughly €130.1 bln. The government says it will use expanded
borrowing and special funds to accelerate infrastructure and rearmament. The
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.
