German cabinet passes 2025 draft budget and budget framework for 2026
By Maria Martinez
BERLIN, June 24 (Reuters) - Germany's cabinet approved on Tuesday the draft budget for 2025 and the budget framework for 2026 with record investments in both years to stimulate growth after Europe's biggest economy failed to grow for two consecutive years.
The drafts include investments of 115.7 billion euros ($134 billion) in 2025 and 123.6 billion euros in 2026, up from 74.5 billion euros in 2024.
The draft budget for 2025 also includes the mid-term financial plan until 2029, which shows that Germany will raise defence spending to 3.5% of economic output by 2029 funded through a nearly 400 billion euro borrowing programme.
This investment surge will be possible thanks to a special 500 billion euro infrastructure fund and an exemption from debt rules for defence spending approved in March.
After former chancellor Olaf Scholz's coalition collapsed in November, the last government ran out of time to pass the 2025 budget. Germany has been operating on a provisional budget since the start of the year.
($1 = 0.8626 euros)
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