Germany reaches agreement with EU Commission on 2025–29 spending plan

Berlin (dpa) – The German government has reached an agreement with the European Commission on a multi-year fiscal plan, government sources confirmed on Tuesday.

The plan outlines the country’s maximum allowable growth in net primary public spending from 2025 to 2029.

The agreement sets out a spending path under the EU’s Stability and Growth Pact, with formal approval from the Cabinet expected on Wednesday.

The spending framework aligns with Germany’s 2025 federal budget, already approved by the Cabinet last month.

“Due to increased investments in infrastructure, security, and defence this year and next, net public spending will rise sharply,” the sources said. But from 2027 onward, growth in net expenditures is expected to slow significantly.

According to the Handelsblatt business newspaper, the agreement means Germany’s recent spending commitments – including a special debt-financed fund for military upgrades and infrastructure – are, in principle, compatible with EU rules.

However, Handelsblatt notes that a formal deficit procedure against Germany later this year cannot be ruled out, especially when the 2026 budget is submitted in autumn. (15 July)