An outgoing Bundestag passed a CDU/CSU and SPD bill, amended jointly with the Greens, that moved defence spending above 1 percent of GDP outside the debt brake and added a €500 billion fund. Energy-intensive output kept falling. Federal interest is planned to almost double by 2030.
Germany's 2027 draft federal budget, introduced to the Bundestag by Finance Minister Lars Klingbeil on 8 September 2026, plans net borrowing of €118.7 billion in the core budget. Only €33.4 billion of that is the ordinary room the debt brake allows, and the government says it will use all of it. The other €85.4 billion is borrowed under a constitutional exemption, mainly for defence and security. The €500 billion infrastructure and climate-neutrality fund adds about €54.9 billion of market borrowing in 2027. Federal interest in the core budget is planned at €41.9 billion in 2027 and €80.7 billion in 2030, which the government puts down mainly to a higher debt stock and higher bond yields. The Bundesbank already counts general government debt at €2.838 trillion for 2025, or 63.5 percent of GDP, up from 62.2 percent. That is still below the 67.9 percent of 2021.
The exemption was written by the old parliament. The election was on 23 February 2025. On 18 March, a week before the new Bundestag met, the outgoing one passed the SPD and CDU/CSU bill amending Articles 109, 115 and 143h of the Basic Law by 512 votes to 206, against a two-thirds mark of 489. The Bundestag's own record says the Union and the SPD did not have two thirds on their own; the bill passed in a version amended jointly with the Greens. The Bundesrat approved with 53 votes on 21 March, and the change took effect on 25 March 2025. Spending on defence, civil protection, intelligence services, IT security and aid to states attacked in breach of international law no longer counts against the borrowing cap above 1 percent of GDP. The €500 billion fund, with 12 years to commit it, €100 billion for the states and €100 billion for the Climate and Transformation Fund, sits outside the cap too. The states got 0.35 percent of GDP in structural borrowing. In the budget committee the AfD, FDP, Die Linke and BSW voted against. The centre-right party that led the change now leads the government. Label: evidenced domestic constitutional change, cross-party, centre-right author.
The international pipes are real but sit beside the decision, not above it. The sponsors cited Russia's war and the new United States administration, and wanted a signal before the NATO summit in The Hague. At that summit, on 25 June 2025, allies committed to 5 percent of GDP by 2035, at least 3.5 percent of it core defence. The 2027 budget release says Germany reaches the 3.5 percent NATO ratio by 2029. On 10 October 2025 the EU Council activated the national escape clause for Germany: up to 1.5 percent of GDP a year of flexibility for higher defence spending over four years, without a new excessive deficit procedure. Germany had asked on 24 April 2025, after a Commission communication of 19 March invited every member state to use the clause in a coordinated way. Label: evidenced. These are pledges Germany signed and permissions it requested. Its own exemption was in the Basic Law three months before the NATO number existed.
Industry moved the other way. The Federal Statistical Office says output in the five energy-intensive branches (chemicals, metals, glass and ceramics, paper, coke and refined petroleum) was 17.8 percent lower in 2025 than in 2021. From February 2022, when Russia's full invasion began and sanctions followed, to March 2026 it fell 15.2 percent, against 9.5 percent for industry as a whole. Those branches use about three quarters of industrial energy. Eurostat's electricity price for a large industrial user (20 to 70 GWh a year, before VAT and recoverable taxes) in Germany was 12.67 euro cents per kWh in early 2021, 19.39 in late 2022 and 15.95 in late 2025, against 13.42 for the EU as a whole in late 2025. The latest reading, early 2026, is 14.64. Germany paid above the EU average before the war too.
The response came on an EU template. The Industriestrompreis, €3.8 billion for 2026 to 2028, was approved by the Commission on 16 April 2026 under its Clean Industrial Deal State Aid Framework. The conditions are Brussels' own: a relieved price no lower than €50 per MWh, no more than three years, and at least half the aid reinvested in assets that cut electricity system costs. Companies claim the 2026 money after the year ends, with applications expected from December 2026. Label: evidenced EU framework setting the shape of national industrial aid.
Shared outcomes are not shared intent. Germany's borrowing rose through a constitutional vote its own parties made, on an election calendar its own parliament used, inside NATO and EU frameworks that grant room rather than give orders. The pattern here travels through pledges and permission slips Germany signed, not through a hidden hand.
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