German finance minister defends 'painful compromises' in 2027 budget

German Finance Minister Lars Klingbeil on Tuesday defended his budget plans for 2027 in parliament, arguing that the coalition government has been forced to make "painful compromises" in a tricky global situation. 

"My vision is a Germany of the future that is sovereign and resilient in times of crisis - a strong country that is innovative and also socially just," said Klingbeil, who also serves as vice chancellor. 

"The world will remain bumpy. That will not change in the coming years. But I want us as a country to free ourselves from that a little."

Klingbeil, whose centre-left Social Democrats are in coalition with Chancellor Friedrich Merz's conservatives, said the effects of the government's investment policy and reforms were already visible amid encouraging economic data from 2026 so far. 

Since taking office in mid-2025, Merz's government has increased expenditure to record levels in an effort to revive the struggling economy and rearm the Bundeswehr, Germany's military, in line with new NATO targets. 

The draft 2027 budget provides for spending of €555.4 billion ($645 billion) - slightly more than this year. Total new borrowing is set to reach just over €200 billion.

Opposition parties have criticized the government's spending, a clear departure from years of tight budgets under former chancellor Angela Merkel. 

Merz's government is set to raise a total of €1 trillion in debt over its time in office, said Dietmar Bartsch from The Left party, calling the figure "madness."

Green politician Sebastian Schäfer also slammed the plans. "This country deserves a better budget. This country deserves a better government," Schäfer said.

The far-right Alternative for Germany (AfD) complained of "unconstitutional accounting tricks" to circumvent debt rules. 

"There is only one area where savings are being made in this budget: the public," said AfD lawmaker Michael Espendiller. "The finance minister could change that. He is not doing so. He is doing the opposite."

Klingbeil sought to wave away the criticism. "Defending yourself without new debt is like flying to the moon without a rocket," he said.

However, if so much new debt was being taken on, it must also deliver results - jobs and innovation must be created in Germany, he said.

The debate in the Bundestag, Germany's lower house of parliament, came on the first day of business following the summer recess.

It also follows the landmark election in the eastern state of Saxony-Anhalt, where the AfD won a resounding victory on Sunday.