24 June 2025 | Euro

Merz cabinet approved Germany's draft budget for current year and medium-term financial plan

Merz cabinet approved Germany's draft budget for current year and medium-term financial plan

The Cabinet of German Chancellor Friedrich Merz has approved the budget for 2025 and medium-term financial plan. According to the documents, a substantial increase in government borrowing is expected in order to build up the country's military capabilities.

Germany's budget for the current year includes a net new debt amounting to 82 billion euros ($95 billion). According to the government's plan, it will be increased gradually to just above 126 billion euros (almost 146 billion dollars) by 2029. Over the five years to 2029, net new borrowing will reach approximately 500 billion euros (about $580 billion).

The increase in defense spending will help Germany meet the NATO alliance's new goal of allocating at least 3.5% of GDP to the military. Now this value stands at 2%.

The government's next step involves sending the budget plans to the country's parliament for approval by lawmakers in both houses. The upper house should give a final assessment of the projects at the end of September.

Elena Berseneva MarketCheese
Period: 31.10.2026 Expectation: 1700 pips
Selling EURUSD on fundamentally strong dollar
25 September 2026 31
Gold sell
Period: 31.10.2026 Expectation: 4000 pips
Go short on gold with $4,300 in mind
24 September 2026 47
Period: 31.10.2026 Expectation: 100 pips
Buy Brent crude upon breaking $104.60
24 September 2026 44
Period: 02.11.2026 Expectation: 1700 pips
GBPUSD sell-off targets 1.3200
22 September 2026 49
Period: 31.10.2026 Expectation: 300 pips
Buying AUDCAD with 1.0000 in sight
21 September 2026 56
Period: 31.10.2026 Expectation: 700 pips
Invest in USDJPY up to 157.70
21 September 2026 47
Go to forecasts