(de-news.net) – The current fiscal strategy articulated by Federal Finance Minister Lars Klingbeil (SPD) for the 2025 budget and the medium-term financial framework underscores a paradigm shift toward expansive, debt-financed public investment, aimed at fostering economic growth, modernization, and national security. In this context, the Federal Cabinet ratified a 500-billion-euro investment program targeted at infrastructural development and climate protection, complemented by a federal expenditure plan of 503 billion euros vis-à-vis projected revenues of 421.2 billion euros.

The fiscal policy framework delineates several core priorities: the advancement of structural reforms to enhance national competitiveness, the provision of social relief mechanisms, and the observance of a constitutionally enshrined investment ratio exceeding 10 percent. Substantive appropriations are designated for sectors including early childhood education, the expansion of affordable housing, digital infrastructure, and notably, transportation—specifically, an allocation exceeding 100 billion euros for the national railway network by 2029. Additionally, supplementary allocations from earmarked special funds are anticipated to surpass 61 billion euros in the fiscal year 2025.

Within the defense sector, the financial blueprint foresees a phased augmentation of military expenditures to 3.5% of gross domestic product by 2029, with a NATO-aligned interim target of approximately 2.4% to be attained within the current fiscal year.

Despite the substantial projected increase in public debt, the Ministry articulated a strategic reorientation away from the previously upheld principle of a structurally balanced federal budget—the so-called “black zero.” This shift was justified on the grounds that proactive, debt-financed investment is deemed less fiscally burdensome in the long term than the economic stagnation and infrastructural degradation associated with under-investment.

Projections within the financial framework reveal a cumulative funding gap of 144 billion euros between 2027 and 2029. The identified determinants of this fiscal imbalance include mandated repayments of debt incurred during the COVID-19 pandemic, escalating interest liabilities, and the constraining effects of the constitutionally mandated debt brake, which is set to impose stricter limits on net borrowing as of 2029.