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    Home > Finance > German finance minister urges cuts to plug 30-billion-euro gap in 2027 budget
    Finance

    German finance minister urges cuts to plug 30-billion-euro gap in 2027 budget

    Published by Global Banking & Finance Review®

    Posted on August 22, 2025

    2 min read

    Last updated: January 22, 2026

    German finance minister urges cuts to plug 30-billion-euro gap in 2027 budget - Finance news and analysis from Global Banking & Finance Review
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    Tags:Fiscal consolidationPublic FinanceGovernment fundingeconomic growth

    Quick Summary

    Germany's Finance Minister Lars Klingbeil urges savings to address a 30 billion euro gap in the 2027 budget, focusing on growth and structural cuts.

    Table of Contents

    • Addressing the 2027 Budget Gap
    • Proposed Savings Strategies
    • Fiscal Pressures and Priorities

    German Finance Minister Calls for Savings to Address 30 Billion Euro Budget Gap

    Addressing the 2027 Budget Gap

    BERLIN (Reuters) -Germany's Finance Minister Lars Klingbeil urged ministries to draw up substantial savings plans to help plug a budget gap of more than 30 billion euros ($34.80 billion) in 2027, according to a letter seen by Reuters on Friday .

    The German cabinet approved in July a 2026 draft budget featuring record investment and three times as much borrowing as this year as it aims to bolster infrastructure and defence.

    Klingbeil warned in the letter that fiscal pressures will grow from 2027 and called for a "comprehensive review of tasks and expenditures".

    Proposed Savings Strategies

    The finance ministry's consolidation strategy hinges on boosting growth through record public investment and incentives for private capital, alongside structural cuts.

    Fiscal Pressures and Priorities

    Klingbeil proposed achieving savings of at least 1% of federal spending in the 2027 budget via task reviews and performance- and impact-based budgeting.

    "Not everything that is desirable can also be financed," Klingbeil said in the letter. "We must set clear priorities."

    The finance ministry will convene state secretaries in early September to discuss steps towards the 2027 budget and the financial plan to 2030.

    ($1 = 0.8621 euros)

    (Reporting by Maria Martinez, Editing by Rachel More)

    Key Takeaways

    • •Germany faces a 30 billion euro budget gap in 2027.
    • •Finance Minister Lars Klingbeil calls for savings plans.
    • •Proposed savings include boosting growth and structural cuts.
    • •Fiscal pressures expected to increase from 2027.
    • •State secretaries to discuss budget steps in September.

    Frequently Asked Questions about German finance minister urges cuts to plug 30-billion-euro gap in 2027 budget

    1What is the budget gap for Germany in 2027?

    Germany faces a budget gap of more than 30 billion euros ($34.80 billion) in 2027.

    2What did Finance Minister Lars Klingbeil propose?

    Klingbeil proposed achieving savings of at least 1% of federal spending in the 2027 budget through task reviews and performance-based budgeting.

    3What is the focus of the German cabinet's 2026 draft budget?

    The 2026 draft budget approved by the German cabinet features record investment and aims to bolster infrastructure and defense.

    4When will the finance ministry discuss the 2027 budget?

    The finance ministry will convene state secretaries in early September to discuss steps towards the 2027 budget and the financial plan to 2030.

    5What did Klingbeil emphasize regarding financing?

    Klingbeil emphasized that not everything that is desirable can be financed and that clear priorities must be set.

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