In mid-July, the German government submitted a multiannual budget programme to the European Commission. The adjustment period will be seven years, from 2025 to 2031, and should enable it to avoid a situation of excessive public deficit.
In accordance with the revised Stability and Growth Pact for 2024, the Merz government has submitted its public spending growth path, which takes into account Germany’s activation of the Pact’s national opt-out clause to increase military spending.
According to this trajectory, growth in German net primary expenditure should not exceed 4.4% in 2025, 4.5% in 2026, 2.3% in 2027, 1.7% in 2028 and 1.6% in 2029. Without the activation of the Pact’s derogation clause, this trajectory would be as follows: 3.1% in 2025, 3.0% in 2026, 2.7% in 2027, 2.1% in 2028 and 2.0% in 2029.
With reference to the decision by NATO countries to increase their defence spending to 5% of GDP by 2035 (see EUROPE 13667/1), Germany aims to increase its spending from 2.1% in 2024 to 3.1% in 2029.
According to the German multiannual programme, the public deficit should remain below 3% of national GDP over the next five years, according to the following trajectory: 2.9% of GDP in 2025, 2.8% in 2026, 2.3% in 2027, 1.6% in 2028 and 1.0% in 2029. And German public debt in relation to national GDP would stabilise at 65% of GDP in 2026, according to the following trajectory: 62.5% of GDP in 2024, 63.8% in 2025, 64.8% in 2026, 64.5% in 2027, 63.8% in 2028 and 62.6% in 2029.
To see the German budget programme (in German), go to https://aeur.eu/f/i1b (Original version in French by Mathieu Bion)