Several high-ranking German economists have expressed scorn and criticism of Germany’s federal budget plan for 2026 to 2030.
Prominent independent economist Daniel Stelter yesterday called Germany’s leaders “total failures” in a first response on X, accusing them of driving up the already high taxes instead of cutting back on expenses.
Also yesterday, economics professor Veronika Grimm, a member of the German Council of Economic Experts, wrote on X the plan was “not good at all and very worrisome”, especially with regard to the rocketing interest expenses and the debt-financed expense explosion.
The draft budget was greenlighted by the coalition government of the Christian Democratic Union (CDU) and Social Democratic Party (SPD) today.
It includes hugely higher defence spending, new consumer taxes as well as cuts to social expenditures.
Defence spending is set to rise form €83 billion in 2026 to €106 billion in 2027, a rise of almost 28 per cent. Total government expenditure is planned to amount to €650 billion – meaning that in 2027 Germany will spend one sixth of its government expenditures on defence.
To make up some of the expected budget shortfall, the government coalition is introducing a number of new taxes.
In 2028, a sugar tax will be introduced, That is expected to bring in €450 million per year. Similarly, a “plastic fee” will be levied on products made from plastics.
Germany is also planning to start taxing cryptocurrencies and will raise the tobacco tax by 20 per cent.
This will be far from enough to cover the shortfall, though.
The planned budget therefore introduces a number of new tax burdens for Germans . These are expected to hit the working population and families most – potentially including an end to the joint taxation of married couples, which would greatly increase their tax burden.
Despite all these tax increases, the government also plans to greatly increase new debt to pay for the additional expenses, from €98 billion in 2026 to €153 billion in 2030 – at the same time interest payments are set to almost double in the coming years to €79 billion in 2030.
Now the draft budget has received the go ahead, the individual federal ministries have to submit their financial planning based on the draft by July. In autumn 2026, the German parliament (Bundestag) will then pass the final budget.
