Germany's record 2027 budget leaves out the electricity tax cut Merz promised

Germany's budget committee has finished work on a 2027 federal budget of more than €560 billion, with new borrowing above €210 billion — the second-highest in the Federal Republic's history — and no money for the electricity tax cut Chancellor Friedrich Merz promised four weeks ago.

The roughly €5.4 billion needed for the cut is not in the draft, and it remains open whether it will be added before the Bundestag adopts the budget at the end of November. Finance Minister Lars Klingbeil of the SPD currently sees no fiscal room for it, even though the measure is written into the coalition agreement between the CDU/CSU and the SPD.

Criticism came from inside the coalition as well as from the opposition. CDU budget politician Mathias Middelberg said promises made to citizens must be kept: "then you have to stick to it in the end." He said there had been a heated exchange at the previous day's CDU parliamentary group meeting with Merz, and that a cut would have been possible "if we had really made an effort."

Wolfgang Steiger, general secretary of the CDU's economic council, said the last word on the electricity tax had not been spoken and that personal credibility was now at stake. SPD parliamentary manager Dirk Wiese said any relief would have to be financed through new debt and that his party was not averse to it; no proposal for offsetting the cost has been tabled.

The coalition committee is expected to take up the electricity tax again on Tuesday.

Greens parliamentary group leader Britta Haßelmann called the chancellor's promise a broken one and accused the government of having no plan. Linke leader Ines Schwerdtner said €560 billion was the highest ever while €5.4 billion was said to be missing for the electricity bills of families and pensioners. AfD budget expert Michael Espendiller said interest payments would exceed €80 billion a year in the 2030s and criticised tax increases on alcohol and tobacco.

Greens budget politician Sebastian Schäfer said a cut could still be anchored through a plenary motion without a new committee session, though he called the procedure "highly unusual". Linke budget lawmaker Dietmar Bartsch called such a late intervention technically possible but politically irresponsible.