The German federal cabinet has approved the draft budget for 2027, which includes a record-breaking new debt issuance of over €200 billion.
The plan outlines total projected expenditures of €555 billion, marking a significant departure from previous fiscal restraint and relying heavily on borrowing to fund state operations and investments.
Critics have immediately condemned the scale of the borrowing.
One commentator described the proposal as a "debt and tax orgy" with no positive outcome, highlighting the political friction surrounding the government's financial strategy.
The high cost of servicing this debt is also a concern, with estimates suggesting interest payments alone could reach €115 million per day.
This development follows a period of intense debate over Germany's fiscal path, including recent discussions on healthcare reform and hospital consolidation. The budget draft comes as the government seeks to balance substantial spending needs against a challenging economic backdrop, with global fragmentation risks cited by the World Economic Forum as a potential drag on growth.
The approval by the cabinet is a procedural step; the budget must now be presented to the parliament for further scrutiny and eventual adoption.
Investors and market participants will be watching closely to see how this increased debt load impacts German bond yields and the broader Eurozone fiscal landscape.