Controversy over the 2025 budget draft: record investments and criticism!

Controversy over the 2025 budget draft: record investments and criticism!

Federal Finance Minister Lars Klingbeil (SPD) today presented the draft budget for 2025 and the financial planning until 2029 in the Bundestag. The discussion about the budget already promises to be controversial. The focus is particularly on the planned reduction in electricity tax, which is highly controversial in the coalition. The Greens have accused the minister of using “budgetary tricks” with regard to a special fund worth billions in order to justify the new debt.

The 2025 budget includes planned spending of 503 billion euros, an increase of 6.1% compared to the previous year. A particularly high proportion, namely 81.8 billion euros, is to be financed through new debt, which is more than twice as much as in the previous year. Together with over 60 billion euros from debt-financed special funds, it becomes clear that the federal government is relying on intensive borrowing.

Key points and investment projects

At more than 190 billion euros, the budget of the Ministry of Labor and Social Affairs is the largest item within the new budget. The federal government is also planning record investments of over 115 billion euros for 2025, which is 55% more than in the previous year. These investments are intended in particular for the Bundeswehr, the renovation of railway lines as well as for schools, daycare centers, hospitals and social housing. By 2029, the federal government's annual investments are expected to increase to almost 120 billion euros.

The special fund allows additional spending of 500 billion euros over a period of 12 years, with 100 billion euros to flow to the states and into the Climate and Transformation Fund (KTF). These funds are essential for the planned structural reforms to promote investment and reduce bureaucracy.

Financing difficulties and budget consolidation

Despite the high expenditure, the government is also planning savings. A high priority is budget consolidation, which also includes savings in personnel and administrative expenses. However, it is clear that the financing gaps will grow to an estimated 144 billion euros between 2027 and 2029. A point that is particularly important in the debate about budget management.

Another point of contention is the decision not to reduce electricity tax for everyone, but only for the manufacturing sector. The coalition agreement announced an electricity tax cut for everyone, but this was subject to financing. It also remains unclear when these measures can actually be implemented. CSU boss Markus Söder names January 1, 2027 as a possible date for the comprehensive reduction in electricity tax.

The government plans not only show the challenges before the Bundestag, but also the balance between investments in future projects and the need to maintain a stable budget. The draft budget is scheduled to be approved by the Bundestag in mid-September 2025.

For detailed information on expenses and income until 2029, see the information on Swabian and the Federal Ministry of Finance.