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Investing.com -- Germany’s Finance Minister Lars Klingbeil has urged government departments to prepare significant cost-cutting measures to tackle a projected budget shortfall of more than €30 billion in 2027.
In a letter cited by Reuters on Friday, Klingbeil cautioned that fiscal strains will intensify from 2027 and stressed the need for a “thorough reassessment of responsibilities and expenditures.”
He suggested that savings equivalent to at least 1% of federal spending be identified in the 2027 budget through efficiency reviews and performance-based budgeting.
“Not everything we would like to finance will be possible,” the minister wrote, underscoring the need to establish strict spending priorities.
His appeal for tighter fiscal discipline follows the cabinet’s approval in July of a 2026 draft budget, which included record investment commitments and borrowing levels three times higher than in 2025.
The ministry plans to gather state secretaries in early September to discuss steps toward finalizing the 2027 budget and the financial plan extending to 2030.
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