Germany’s coalition has hammered out a massive €560.9 billion budget for 2027 after all-night marathon negotiations, sparing some social benefits while leaving a promised electricity tax cut in limbo.
Following a 16-hour reconciliation session that wrapped up at 6 am on Friday, Germany’s ruling CDU/CSU and SPD coalition has cleared a major hurdle towards passing the 2027 federal budget.
But the late-night deal leaves key financial questions unanswered – most notably whether the government can afford a promised cut to electricity taxes.
For international residents in Germany, the agreement brings a mix of immediate relief at the supermarket checkout and continued uncertainty over household energy bills and take-home pay.
What did lawmakers decide?
The Bundestag’s powerful Budget Committee signed off on record federal expenditure of €560.9 billion for 2027 – roughly €5.5 billion more than initially drafted – according to the German Press Agency (DPA).
Roughly one in every three euros will be financed through debt, pushing total new borrowing across the core budget and special funds to around €210 billion.
While opposition MPs blasted the reliance on borrowing as “muddling through”, the government insists it complies with Germany’s constitutional debt brake via exemptions for defence and special infrastructure funds.
Beyond the headline numbers, coalition negotiators finalised several consumer-facing measures ahead of the committee’s marathon session.
Planned cuts to housing benefit (Wohngeld) were scrapped following public pushback, and the €25 monthly immediate child supplement (Kindersofortzuschlag) was preserved for low-income families, though it will be axed for asylum seekers.
Meanwhile, plans for a new plastic packaging tax and a higher sparkling wine tax were dropped entirely, while a proposed three-tier sugar tax on soft drinks has been delayed until January 2028.
READ ALSO: Germany postpones sugar tax and scraps electricity tax cut ahead of budget talks
How could this affect daily life in Germany?
The immediate takeaway is that everyday shopping will not get any pricier as a result of taxes or levies next year. (Although that doesn’t mean it won’t get more expensive for other reasons).
Takeaway coffee cups, fizzy drinks and sparkling wine will all escape new taxes in 2027, while those relying on housing allowances will avoid threatened benefit cuts – though the amount of those payments will remain frozen rather than adjusted for inflation.
But household budgets still face a squeeze. The coalition failed to find the €5.4 billion needed to lower the electricity tax to the European minimum, leaving a promised saving of roughly €6 to €8 a month for an average household hanging in the balance.
READ ALSO: Electricity and gas bills in Germany expected to rise in early 2027
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: thelocal.de
