Latest news with #LarsKlingbeil
Local Germany
19 hours ago
- Business
- Local Germany
Kitas and Deutschlandticket: What Germany plans to spend money on in 2026
If you're feeling like you've heard a whole lot of federal budget news as of late, you're not wrong. It was only a month ago that the federal budget plans for this year were approved , and then at the top of July further changes were made to that budget. READ ALSO: Tax cuts and pensions - How Germany's budget changes could impact you Germany's previous traffic light government failed to pass a budget for 2025 when talks broke down between the Social Democrats (SPD), the Greens and the Free Democrats (FDP). So now the new black-red coalition, of the Christian Union parties (CDU/CSU) and the SPD, have been moving to draft and approve budgets for both 2025 and 2026. The draft budget approved on Wednesday July 30th is for 2026. To sum it up concisely, it promises more money for just about everything: from bridges and railway lines, to the German army, as well as digitalisation and education. In this sense, the budget agreement can be seen as the conservatives trying to make good on their previous campaign promises to stimulate the economy and boost Germany's infrastructure and defences. Presenting the draft budget in Berlin, Finance Minister Lars Klingbeil (SPD) said, "We are investing in the future now so that our country will be more modern, fairer and safer tomorrow." German Finance Minister and Vice Chancellor Lars Klingbeil arrives to present a draft of Germany's federal budget for the year 2026. (Photo by John MACDOUGALL / AFP) However, the spending requires that the government take on significant new debt, and there still isn't funding for key tax cuts that had been proposed. Here's the plan as things stand: Big figures A total expenditure of €520.5 billion is planned for 2026, which is 3.5 percent more than is expected for this year. The biggest portion of the budget is to go to the Ministry of Labour and Social Affairs, at around €197.4 billion. Most of that is for an increase in subsidies to the pension insurance scheme. Around €41 billion is budgeted for the long-term unemployment benefit (known as Bürgergeld ), including support for accommodation and heating in 2026. This is around €1.5 billion less than is planned for the current year because the government is counting on a revival of the labour market and a falling number of benefit recipients. FACT CHECK: Are immigrants in Germany taking advantage of the welfare state? Large investments are also planned, including in the renovation of Germany's rundown bridges and railway lines , and towards improving digitalisation and education. Advertisement The German army ( Bundeswehr) is to receive significantly more money next year - its budget is set to be increased by about 32 percent to around €128 billion. Strengthening the German military was among the chief reasons that government leaders pushed to relax the debt brake earlier this year. Defence spending is expected to continue to rise massively in the coming years amid the geopolitical instability in Europe. READ ALSO: Germany has ditched the debt brake, but what will the consequences be? What services are being funded? Several projects announced in the black-red government's coalition agreement are expected to be funded next year. Among these are subsidies for social housing, more money for Kitas, and a continuation of the Deutschlandticket . A reduction of VAT on food in restaurants is also planned, plus an increase in the commuter allowance. What's not being funded? The draft notably does not include funding for a reduction in taxes on flights. Last year, an aviation tax was increased. There is also no mention of an electricity tax reduction for private households, which was suggested in the conservative's election campaign. This would cost an additional €5.4 billion. "At the moment, there is no foreseeable room for manoeuvre in the federal budget," government sources told DPA. Cuts are planned for development spending, and job cuts are planned in the federal administration, and in security agencies. Advertisement Can Germany afford it? To help fund next year's budget, the government plans to take out €89.9 billion in new loans, as well as taking €84.4 billion from the special funds recently set up for infrastructure and climate protection. German leaders are faced with mounting budget constraints, as their plans for boosting the economy, defence and revitalising infrastructure are quickly adding up to a hefty price tag. In the following years, from 2027 to 2029, a €127 billion gap is forecast. "The 2027 budget will be an enormous challenge for the government," Finance Minister Klingbeil said, hinting that austerity measures are likely to follow. READ ALSO: How could welfare reforms in Germany affect you? With reporting by DPA.
Yahoo
20 hours ago
- Business
- Yahoo
Germany's Klingbeil stresses solidarity with Baltic states in Vilnius
German Vice Chancellor Lars Klingbeil on Tuesday assured fellow NATO members Lithuania, Latvia and Estonia of continued German assistance in light of Russia's expansionist ambitions, as he was in Vilnius for a two-day visit. "The Baltic states can always rely on the solidarity and support of the Federal Republic of Germany," said Klingbeil, who also serves as finance minister, after a meeting with his three counterparts in the Lithuanian capital. Klingbeil noted a recent decision by the government to exempt defence spending from Germany's strict debt rules, which would allow the country to massively increase investment in security in the long term. He said those plans also include further development of a German brigade stationed in Lithuania. Lithuanian Finance Minister Rimantas Šadžius welcomed the plans which he said would strengthen security in Europe. Klingbeil intends to pay a visit to the Bundeswehr's Lithuania brigade himself, as well as to a multinational NATO battle group led by Germany in the country. Solve the daily Crossword
Euractiv
2 days ago
- Business
- Euractiv
Germany agonises over €200 billion budget hole
BERLIN – The German cabinet passed its 2026 budget draft on Wednesday, leaving it open, however, how the government will fill gaping holes in financial planning over the coming years. Germany's governing parties had loosened the country's strict debt rules earlier this year, allowing the coalition to borrow more for additional defence spending and investment in infrastructure. German Finance Minister Lars Klingbeil, a Social Democrat (SPD), praised the planned 'record investment' of €126.7 billion for 2026, including funding for infrastructure and the green transition of the economy. Defence spending will also rise by a third to €82.7 billion. Germany's constitutional borrowing limit, the 'debt brake', had long prevented investment in strengthening the country's neglected defence architecture and its ageing bridges and roads. Disagreements over how to square policy goals with fiscal constraints had, notably, pushed the previous coalition government to collapse. Germany's borrowing over the next few years has now been projected to balloon to some €850 billion, according to the 2025 budget draft and long-term planning presented by Klingbeil in June. It emerged, however, in recent days that this still leaves a budget hole around €30 billion larger than expected, amounting to shortfalls of €172 billion through 2029. The new figures arose partly because recent government decisions brought forward plans for pension subsidies as well as new compensation pledges for regional states and municipalities, which will lose revenue due to planned growth-enhancing measures. How Germany plans to spend €850 billion "I don't see any particular value in keeping the money and not spending it,' Germany's new finance minister said following the unveiling of his first budget. Klingbeil's popularity 'won't increase' It remains unclear how the gaps are to be closed, with additional growth unlikely to fill them. The government is currently aiming for more than 1 per cent of annual potential growth through 2029. Klingbeil said a mix of measures, including more cuts, would be necessary just to fill the 2027 shortfall, expected to amount to over €30 billion. 'This will be one of the biggest domestic challenges that we will have to overcome in the next 12 months,' he told reporters. 'Everyone at the cabinet table will have to make savings,' he said, adding that 'the popularity of the finance minister among the cabinet won't exactly increase'. Klingbeil also said Germany was planning to reform structures like the ballooning social security systems, for which it had established several expert commissions. Critics have long urged Germany to undertake deeper structural reforms to balance its books. "Instead of reforming the debt brake, we urgently need structural reforms to reduce the funding gap,' said Veronika Grimm, a fiscally conservative economist who advises the German economy ministry, led by the centre-right Christian Democrats. (aw)
Straits Times
2 days ago
- Business
- Straits Times
EU trade deal will take a toll on German economy, finance minister says
Sign up now: Get ST's newsletters delivered to your inbox German Finance Minister, Lars Klingbeil said he wished for a different outcome. BERLIN - German Finance Minister Lars Klingbeil is dissatisfied with the European Union's (EU) trade deal with the United States, as he thinks it will take a toll on Germany's economic growth, he said on July 30. 'I have no illusions about it, it is rather growth-weakening,' Mr Klingbeil said in the presentation of the 2026 draft budget, lamenting that the EU was 'too weak' in the negotiations. The US struck a framework trade agreement with the EU on July 27, imposing a 15 per cent import tariff on most EU goods. 'I would have wished for a different outcome,' Mr Klingbeil said. 'Still, all in all, it is good that there is an agreement with the US, that there are no further escalations.' REUTERS
DW
2 days ago
- Business
- DW
Germany updates: Cabinet approves 2026 draft budget – DW – 07/30/2025
German lawmakers will scrutinize the €520.5 billion budget, which includes increased spending on infrastructure and defense next. Meanwhile, Berliners were told the party at the Brandenburg gate is over. DW has more. The German government approved the 2026 draft budget, which includes planned investments totaling €126.7 billion ($146.4 billion) and borrowing of €174.3 billion. It came with a warning from Finance Minister Lars Klingbeil that significant austerity measures will likely be needed starting in 2027. Meanwhile, Germany's economy shrank by 0.1% in the second quarter of the year, according to preliminary data released by the federal statistics office, German Cabinet has approved Finance Minister Lars Klingbeil's 2026 draft budget, which outlines spending of €520.5 billion ($600.3 billion) and new borrowing totaling about €174 billion. Europe's largest economy is shifting away from decades of fiscal conservatism to revive economic growth, modernize its aging infrastructure, and boost military spending. German lawmakers are expected to begin discussions on the budget by the end of September, with final approval anticipated by year's end. Berlin's large New Year's Eve party at the Brandenburg Gate will not take place this year, organizer Benedikt Alder told the German news agency, DPA. The cancellation follows a decision by the Berlin city government to withdraw financial support for the celebration. Berlin's Governing Mayor Kai Wegner told DPA that the city will no longer fund the show, which has drawn thousands of revelers and millions of TV viewers over the decades. "In my opinion, it's not the job of taxpayers to finance such events," Wegner told dpa. "Especially not in times of tight budgets." With no financial backing secured, organizers were left with no choice but to call off the festivities, Alder said. Germany's Interior Minister Alexander Dobrindt is reviewing the nationwide use of security software developed by the US company Palantir. A ministry spokeswoman told magazine that the evaluation is ongoing and no decision has yet been made. The software was specifically developed for security agencies and is used by intelligence services, the military, and police. "Palantir is not a neutral IT provider but closely linked to U.S. intelligence agencies with clear geopolitical aims,"Johannes Schätzl, a Social Democrat lawmaker, said. He added that German security forces should not use the company's software. Green Party deputy leader Konstantin von Notz said that at a time when the US government is becoming less reliable, cooperation with Palantir should be ruled out. Dobrindt generally supports the use of such software and received backing from Jens Spahn, a fellow member of the ruling conservative CDU/CSU. Spahn said Palantir "would greatly help" police, adding that criminals use all digital tools available and "the state must keep up within the law." Last week, the Society for Civil Rights and the Chaos Computer Club filed a constitutional complaint against Palantir's use in Bavaria, arguing that it violates privacy rights by linking unrelated individuals to criminal data. The software is used on the state level in Bavaria, Hesse and North Rhine-Westphalia. Germany's economy shrank in the second quarter, according to provisional data released on Wednesday. The country's gross domestic product (GDP) fell by 0.1% compared to the first quarter, the federal statistics office Destatis said. This follows a modest revision of Q1 growth to 0.3%. Destatis said the quarterly decline was due to lower investment in machinery, equipment, and construction. However, consumer and government spending provided some support. Year-on-year, GDP remained flat when adjusted for prices, but showed a slight increase of +0.4% when calendar effects were also considered. A rescue mission is underway in northern Pakistan for German Olympic biathlon champion Laura Dahlmeier, who was seriously injured in a rockfall on Laila Peak in the Karakoram mountain range. The 30-year-old was climbing at around 5,700 meters (18,700 feet) when falling rocks swept her away. Her climbing partner raised the alarm after being rescued. Officials say helicopter access is impossible. "The conditions at the altitude where she was injured are extremely challenging, and a team of foreign climbers will launch a ground rescue mission today," Areeb Ahmed Mukhtar, a senior local official in Ghanche district, said. Dahlmeier, a seasoned mountaineer, made history at the 2018 Winter Olympics, winning both the sprint and pursuit events. German news channel Welt TV is launching a weekly program entirely produced and hosted by artificial intelligence. Titled KI-Welt, the show covers topics like AI, robotics, and future tech, with all editorial processes, from research to presentation, handled by AI with human supervision. Jan Philipp Burgard, Welt TV's editor-in-chief, said the experimental show is to show what is already possible with AI. "We won't be able to stop the AI revolution, so we should embrace it and help shape it," he said. A computer-generated avatar anchors the show. The first episode will air on Thursday. Profits at German carmaker Mercedes-Benz have fallen by 55.8% in the first half of the year, the company says. The Stuttgart-based carmaker said post-tax earnings plummeted from €6.1 billion to around €2.7 billion in the first half of the year. The business cited tariffs, lower sales volumes, and costs linked to efficiency measures as reasons for the decline. Looking ahead, Mercedes now expects full-year group revenue to fall significantly below last year's level. The German government is expected to approve the 2026 draft budget on Wednesday, which outlines spending of €520.5 billion ($600.3 billion) and new borrowing totaling about €174 billion. Finance Minister Lars Klingbeil's budget includes €126.7 billion in investments earmarked for modernizing the country. The government, in office since May, has pledged to increase spending to upgrade infrastructure and strengthen the military. Officials also hope the budget will help improve the economic climate, which is projected to recover noticeably in 2025 and 2026 after two years of stagnation. Klingbeil, however, warned this week that significant austerity measures will likely be needed starting in 2027, when a funding gap of approximately €172 billion is expected. from the Bonn newsroom, still staffed by humans. That's no longer entirely the case over at Welt TV, where a new weekly program will soon be produced and presented entirely by artificial intelligence. Meanwhile, the German government is tackling the 2026 draft budget the old-fashioned way, without AI assistance, at least as far as we know. In a notable shift from its long-standing tradition of fiscal restraint, Germany is now spending big: aiming to jumpstart the economy, modernize its aging infrastructure, and boost military investment. We'll be keeping an eye on those stories, and more, right here in this blog.
