Germany’s cabinet has approved a draft 2026 budget on Wednesday featuring record investments and a borrowing level nearly three times higher than last year’s, aiming to strengthen infrastructure and defence while efforts to revive growth.
The country’s borrowing will rise to €174.3 billion ($200 billion) in 2026, up from €50.5 billion ($57.7 billion) in 2024 under the previous government, while investments will reach an unprecedented €126.7 billion ($144.9 billion).
Finance Minister Lars Klingbeil said this shift is important. “It is right that we invest in our security and that we address our investment backlog that has built up over many years.”
The draft budget is part of a medium-term plan through 2029, with total spending of €520.5 billion ($595.6 billion). Interest costs are expected to rise to €66.5 billion ($76 billion) by 2029, above earlier forecasts.
Despite strong investment, Germany faces a €172 billion ($196.7 billion) deficit from 2027 to 2029, prompting strict spending discipline across ministries to limit new expenses and reassess current budgets.
Klingbeil acknowledged the challenges ahead. “Everyone knew that things would get serious in 2027. That’s why I made it really clear in the cabinet, so that no one could say they didn’t know. Now it’s time for everyone to start saving properly.”
The investment increase is supported by a €500 billion ($572.3 billion) infrastructure fund and a March reform that exempts defence spending from Germany’s strict 'debt brake' rule, which caps borrowing at 0.35% of GDP.
Following cabinet approval, parliamentary discussions will begin at the end of September, with final budget approval expected by the end of the year.
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The economic consequences of war rarely remain confined to the battlefield. They ripple through markets, supply chains and investor confidence. For Türkiye, at the crossroads of Europe, the Middle East and Eurasia, the economic shockwaves from the latest Middle East crisis are already being felt.
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The annual pro-Palestinian al-Quds Day march in London, scheduled to take place on Sunday, has been banned by Home Secretary Shabana Mahmood following warnings from the Metropolitan Police about the risk of “serious public disorder.”
Georgia has cancelled international tenders for the construction of major road sections that form part of a regional highway linking the country with the borders of Armenia and Azerbaijan.
Tensions in the region remained high on Tuesday (10 March), as the United States and Iran exchanged increasingly sharp warnings, including threats over the strategic Strait of Hormuz, a critical artery for global oil supplies.
China has urged Afghanistan and Pakistan to resolve their dispute through dialogue after Chinese envoy Yue Xiaoyong met Afghan Foreign Minister Amir Khan Muttaqi, as fighting between the two neighbours entered its eleventh day.
Almost 2,000 people have been evacuated from Iran via Azerbaijan since conflict erupted in the Middle East.
Global oil prices reached a four year high on Monday (9 March), surpassing $119 a barrel, as conflict in the Middle East rumbled on. Meanwhile, the Turkish Military said NATO air defence systems destroyed a missile fired from Iran towards the country.
Iran's new Supreme Leader, Mojtaba Khamenei, was 'lightly injured,' an unnamed Iranian official said on Wednesday, as Tehran and Israel continued to exchange missile and drone strikes - all the latest updates throughout the day on AnewZ.
China has raised the retail prices of petrol and diesel after global oil prices climbed sharply. The country’s top economic planning body, the National Development and Reform Commission (NDRC), announced the move after reviewing international oil market trends.
Global financial markets remained on edge on Friday as the escalating war involving the United States, Israel and Iran continued to rattle investors, fuelling volatility in stocks and sending energy prices sharply higher.
China’s top leadership has unveiled a new push to turn advanced technologies into large-scale industrial priorities as part of the country’s upcoming 15th Five-Year Plan, which will guide economic and social development from 2026 to 2030.
The European Commission sees no immediate impact on the European Union's security of oil supply from the escalating conflict in the Middle East, it said in an email to EU governments, seen by Reuters on Monday (2 March).
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