Budget for the year 2025 is endorsed by the Bundestag
Germany Approves 2025 Federal Budget of 502.5 Billion Euros
Germany's Bundestag has approved a budget for 2025, amounting to approximately 502.5 billion euros. The new budget, which is a significant increase from previous years, is led by Chancellor Friedrich Merz (CDU) and is expected to be a continuation or renewal of a coalition involving the Union and SPD, as was considered probable after the 2025 federal election.
The defense budget is set to increase significantly, with around 62 billion euros allocated for 2025, an increase of 10 billion euros from the previous year. For the first time, more than 86 billion euros will be available for defense spending, for example for the acquisition of new military equipment. An additional 24 billion euros from the special military fund is also planned for defense spending.
The new debt is expected to rise to around 143 billion euros, a level only reached during the corona crisis. To finance this, the government plans a net credit intake of almost 82 billion euros in the core budget, with additional billion-euro loans from special funds for the military and infrastructure.
The majority of the federal budget, around 190 billion euros, is allocated to work and social affairs. Of this, 122.5 billion euros is earmarked for pension insurance. Around 52 billion euros is planned for unemployment benefits, including almost 30 billion euros for the citizen's income.
Investments in transport and infrastructure are also a priority, with around 23.7 billion euros earmarked for investments in the core budget for transport, and an additional 11.7 billion euros from the special infrastructure fund planned. The transport ministry's budget decreases by 6 billion to 38.3 billion euros, but it remains the largest investment budget.
The special fund, totaling 500 billion euros, is approved for additional investments over a period of twelve years. The special fund will be used for repairs of bridges and railway tracks, expansion of energy infrastructure and digitization, funding of hospitals, research and development, sports facilities, construction projects, and education. Additionally, 100 billion euros of the debt-financed funds will be allocated to the Climate and Transformation Fund for climate protection projects.
Lastly, 100 billion euros of the debt-financed funds will be given to the states. The government's decision to increase the defense budget, invest in transport and infrastructure, and provide support for unemployment benefits and pension insurance, among other priorities, highlights the focus on economic recovery and security in the 2025 federal budget.
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