Germany’s parliament has passed the 2025 budget, allowing €116 billion in investments supported by a €500 billion infrastructure fund and special exemptions for defence spending. Finance Minister Lars Klingbeil called it a “huge paradigm shift,” aimed at boosting the economy and strengthening military support commitments to NATO and Ukraine. Defence spending will rise to 2.4% of GDP, though still below NATO’s new 3.5% target.
The total budget reaches €591 billion, combining core spending and special funds, with total borrowing projected at €143.2 billion. Chancellor Friedrich Merz’s coalition now faces challenging discussions for future budgets, including a €30 billion gap projected for 2027. Parliament will debate the 2026 draft next week. Read more on Reuters.