Tuesday's top story: German cabinet approves budget with defence boost and aid cuts
Germany’s cabinet has approved a draft 2027 budget that sharply increases defence spending while reducing funding for development aid and drawing criticism over changes to climate financing.
The budget, which still requires parliamentary approval, would raise defence spending by 33 percent to almost €110 billion as Germany continues a major military build-up launched after Russia’s invasion of Ukraine.
Total government spending is projected to reach €555.4 billion, while new borrowing will rise to €118.7 billion, both higher than previously forecast.
Finance Minister Lars Klingbeil defended the plans, arguing that Germany must invest heavily in security in response to the threat posed by Russia. He said the government had closed a €34 billion budget gap and insisted increased military spending was essential given Europe’s deteriorating security environment.
The budget has attracted criticism from environmental and development groups. Planned transfers from a special climate fund into the regular federal budget have been condemned by climate campaigners, who argue the measures will weaken Germany’s environmental ambitions. Spending on development aid is also set to fall by six percent.
Klingbeil rejected accusations that the government was undermining climate policy, maintaining that the changes would not affect Germany’s legally binding goal of achieving climate neutrality by 2045.
The budget will now be debated in the Bundestag from September, with final approval expected before the end of the year.
READ ALSO: More debt, new taxes - What is in Germany's budget plan for 2027?
Prien proposes shorter parental allowance period and greater role for fathers
Germany’s Family Affairs Minister Karin Prien has proposed changes to parental allowance rules that would reduce the maximum period of support from 14 months to 12 months while encouraging a more equal sharing of childcare responsibilities between parents.
According to reports, mothers and fathers would each be required to take at least three months of parental leave if families are to receive the full entitlement. The remaining six months could then be divided flexibly between the parents. Single parents would be exempt from the new requirement.
The proposal, confirmed by the CDU-led Family Ministry, is still undergoing consultation across government departments. The changes are intended to reflect commitments in the coalition agreement between the CDU/CSU and SPD, which pledged to strengthen incentives for fathers to play a greater role in childcare.
The draft also includes a modest increase in parental allowance payments. The minimum monthly payment would rise from €300 to €330, while the maximum would increase from €1,800 to €1,900. The existing rule limiting parental allowance to up to 65 percent of net income would remain unchanged.
The proposed reforms come as Prien faces pressure to reduce spending, with her ministry required to make budget savings of €500 million next year.
READ ALSO: Will Germany cut back it's 'parental allowance' benefit for families?
Warken softens health reform plans ahead of parliamentary vote
Health Minister Nina Warken has reportedly watered down key elements of Germany’s planned statutory health insurance reform, reducing the burden on patients while increasing the federal government’s financial contribution ahead of a crucial parliamentary vote.
According to reports in the Frankfurter Allgemeine Zeitung, coalition partners the CDU/CSU and SPD have agreed on several amendments to the draft legislation shortly before it is due to pass through the Bundestag and Bundesrat.
Under the revised plans, additional contributions for spouses and partners covered through family insurance will be lower than originally proposed. From 2028, affected insured persons will pay 2.5 percent of contributable income rather than the previously planned 3.5 percent.
Parents with children up to the age of 11 will remain exempt, as opposed to children up to the age of six as originally planned.
To offset the reduced savings, the federal government will provide additional funding. Finance Minister Lars Klingbeil is reportedly allocating hundreds of millions of euros more annually for healthcare costs, while state subsidies to health insurers will be higher than originally envisaged.
The coalition aims to pass the package in the Bundestag this week. It will then go to the Bundesrat for final approval, which is set to meet on Friday for its final session before the summer recess.
READ ALSO: How Germany's public health insurance shake-up will affect families
Woman charged with manslaughter after falling flowerpot kills pedestrian in Berlin
A 32-year-old woman has been charged with manslaughter in Berlin after a flowerpot fell from her balcony and fatally struck a passer-by.
Prosecutors allege the 4.8-kilogramme flowerpot was not properly secured when it was placed on the outside edge of the woman’s balcony, beyond a protective barrier designed to prevent objects from falling.
The pot fell in April and hit a 61-year-old man on the head, causing fatal injuries.
According to authorities, the incident could have been prevented. Investigators noted that the German Weather Service (DWD) had issued a warning about strong winds the day before the accident.
The woman has so far declined to comment on the allegations. Prosecutors have formally brought a manslaughter charge, arguing that the death resulted from negligent behaviour.
The case will now be considered by Berlin’s Charlottenburg district court, which must decide whether to open formal proceedings and set a date for trial.
The incident has drawn attention to safety responsibilities for residents with balcony flower boxes and other outdoor items, particularly during periods of severe weather and high winds.
Porsche reportedly considering further 4,000 job cuts amid ongoing crisis
Porsche is reportedly preparing to cut up to 4,000 additional jobs as the luxury carmaker seeks to reduce costs in response to weak sales and mounting financial pressures.
According to Handelsblatt, the latest round of reductions would primarily affect management and administrative staff. The newspaper also said that around 30 percent of positions at Porsche’s Weissach development centre are under review as part of the company’s restructuring efforts.
A Porsche spokesperson declined to confirm the reported figure but said the company was working on a comprehensive future strategy aimed at improving efficiency and streamlining operations.
The plan is expected to be presented by the end of July, with management and employee representatives currently negotiating a further cost-cutting package.
The reported cuts would come on top of significant workforce reductions already announced by the sports car manufacturer. Earlier plans included the elimination of around 1,900 jobs in the Stuttgart region by 2029, while fixed-term contracts for roughly 2,000 employees have already expired.
In May, Porsche also announced the closure of three subsidiaries, affecting a further 500 workers. The company has been grappling with a sharp downturn in performance, with profits falling dramatically and broader pressures affecting Germany’s automotive sector.
READ ALSO: Will Germany make it easier for companies to dismiss employees?
With reporting by AFP and DPA.
Comments