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 readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on August 22, 2025
2 min readLast updated: January 22, 2026
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.
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".
The finance ministry's consolidation strategy hinges on boosting growth through record public investment and incentives for private capital, alongside structural cuts.
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)
Germany faces a budget gap of more than 30 billion euros ($34.80 billion) in 2027.
Klingbeil proposed achieving savings of at least 1% of federal spending in the 2027 budget through task reviews and performance-based budgeting.
The 2026 draft budget approved by the German cabinet features record investment and aims to bolster infrastructure and defense.
The finance ministry will convene state secretaries in early September to discuss steps towards the 2027 budget and the financial plan to 2030.
Klingbeil emphasized that not everything that is desirable can be financed and that clear priorities must be set.
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