Germany's last-minute budget changes add €3 billion for the jobs agency as tax fights stay open

Germany's Finance Ministry has sent the Bundestag's budget committee a list of more than 1,100 pages of last-minute changes to the 2027 federal budget, and the biggest single item is not a tax cut or a defense project. It is a loan to the Federal Employment Agency, raised by €3 billion to €8.2 billion because unemployment is expected to stay near 3 million next year. The document, known as the Bereinigungsvorlage, sets the starting point for the committee's final session on Thursday, November 12. The governing CDU/CSU and SPD are still arguing over items that are not yet in it: a cut in electricity tax for all households, the planned plastic packaging tax, basic-income rates and a €25 monthly supplement for poor children.

The ministry's own cover sheets, published by Politico Europe, show the scale of the reshuffle ordered by Finance Minister Lars Klingbeil (SPD). n-tv, citing the document, gave its length as 1,134 pages; other outlets have reported a slightly different page count. The figures in this story come from the published cover sheets themselves.

The biggest change is a bigger loan to the jobs agency#

The cover sheet for the labor ministry's budget (Einzelplan 11) lists the "überjährige Darlehen an die Bundesagentur für Arbeit" at €5.2 billion in the government's July draft, with €3.0 billion added, for a new total of €8.2 billion. The ministry's explanation is short: the increase reflects "developments since the government draft was drawn up," taking into account the key figures of the government's October 2026 autumn projection.

n-tv reported that the government's key figures put average unemployment in 2027 at about 2.997 million. The same report said the federal government is already expected to lend the agency up to €9 billion in 2026. Handelsblatt reported that the agency had already signaled extra financing needs because of high unemployment, though the amount had been unclear.

One detail matters for the debt rules. According to n-tv, the loan counts as a "financial transaction," which is not charged against the constitutional debt brake. That means the extra €3 billion raises borrowing without using up the narrow room the coalition has under the brake for its other disputes. It is still money the agency must eventually repay, and it reflects a labor market that has not yet recovered even as the economy grows again, a lag n-tv and Handelsblatt both tied to persistently high joblessness.

Where else the numbers moved#

The other large changes in the cover sheets run in both directions. The chart below shows the old and new 2027 amounts for six budget lines named in the document.

• July draft
• New amount

0

5

10

15

Loan to Federal Employment AgencyJuly draft: 5.2New amount: 8.2

Health fund grantJuly draft: 12.5New amount: 13.15

EV purchase subsidyJuly draft: 0.8New amount: 1.72

Land-based digitalization (D-LBO)July draft: 0.71New amount: 0.91

F126 frigate procurementJuly draft: 1.34New amount: 0

F126 alternative platformJuly draft: 0.88New amount: 0.92

Loan to Federal Employment AgencyHealth fund grantEV purchase subsidyLand-based digitalization (D-LBO)F126 frigate procurementF126 alternative platform

Source: Federal Finance Ministry cover sheets, via Politico Europe

Show the numbers

Budget line	July draft	New amount
Loan to Federal Employment Agency	5.2	8.2
Health fund grant	12.5	13.15
EV purchase subsidy	0.8	1.72
Land-based digitalization (D-LBO)	0.71	0.91
F126 frigate procurement	1.34	0
F126 alternative platform	0.88	0.92

Electric-car subsidy. The title for the "socially graduated subsidy for buying electrically powered vehicles" rises from €803 million to €1.72 billion. The cover sheet says the program "is developing considerably more dynamically" than assumed when it was designed, and that the 2027 amount is being adjusted to actual demand "while keeping the program's overall volume." In other words, the program's total size stays the same but more of it is spent in 2027. The document says the increase is offset from another title in the same chapter of the general finance budget.

Health fund. The flat-rate federal payment to the statutory health insurance fund for "tasks of society as a whole" rises from €12.5 billion to €13.15 billion. The cover sheet ties the €650 million increase to the law meant to stabilize statutory health insurance contribution rates. Tagesschau reported that revenue from the planned tax on sugary drinks is meant to relieve the statutory health insurers, which is why the dispute over that tax inside the Union matters to the health budget.

Defense. Two procurement problems show up. The title for digitalizing land-based operations, which covers the D-LBO soldiers' radio program, rises from €709 million to €909 million. The document attributes the rise to extra costs for concluding the D-LBO soldiers' radio contract and cellular networks for mobile tactical communications. The original F126 frigate title falls from about €1.34 billion to €1 million "following the project decision." A title for an "alternative platform" in the same chapter rises from €878 million to €916 million "to match the current course of the project." A separate title in another chapter adds €350 million for "the procurement of ships 5 to 8." Handelsblatt reported about €11 billion in reallocations inside the defense budget overall, including the dissolution of a €2 billion "global under-spend." Each of these defense pages notes the exemption for defense spending under Article 115 of the Basic Law, which keeps defense outlays above a set threshold outside the debt brake.

What the document leaves out: the coalition's open fights#

The Bereinigungsvorlage is the ministry's list of changes since July. It does not settle the political disputes that coalition leaders were still negotiating this week, and Merkur, citing Table.Briefings, reported early Tuesday that the coalition had briefly held the document back while Thorsten Frei (CDU), CSU regional group leader Alexander Hoffmann and SPD parliamentary leader Matthias Miersch kept negotiating overnight. Merkur listed the main points still open.

Electricity tax. Chancellor Friedrich Merz wants to cut electricity tax to the European minimum for everyone, not only for industry and farming, which already benefit. Tagesschau put the cost at about €5 billion a year and the saving for an average household at roughly €5 to €10 a month. A government spokesman told the broadcaster that "the political will is clearly there," and the Union's finance spokesman Fritz Güntzler said that since the chancellor had set the goal, he was "fairly sure we will find a way." When the tax estimate was released in October, Klingbeil said anyone proposing measures "such as cutting electricity tax" should also say how to pay for them, according to Tagesschau's report on the estimate. Our earlier report covered why Merz now calls the cut his priority.

Plastic packaging tax. Frei said, as quoted by Merkur: "Die Plastiksteuer machen wir nicht," ("We are not doing the plastic tax"), arguing it would have the wrong economic and ecological effect. Environment Minister Carsten Schneider (SPD) said the Union must now propose how to fill the gap by Thursday. Tagesschau put the revenue at stake at more than €1 billion a year from 2028. We covered the coalition split over the plastic tax on Monday.

Sugar tax. Tagesschau reported resistance inside the Union, including a circulating list of more than a dozen MPs opposed to a tax on sugary drinks, and a push to delay its start by six months to January 1, 2028. Frei argued on ZDF, according to Tagesschau, that the tax would steer consumption away from sugar, and that its revenue should relieve the health insurers.

Basic income and the child supplement. Merkur, citing Bild am Sonntag, reported that the Union is pushing to lower basic-income rates from next year, which the SPD calls "completely irresponsible." SPD MP Jan Dieren was quoted as saying the party must not "destroy" recipients' trust that rates at least will not fall. The government had also planned to end the €25 "Sofortzuschlag" for children in poverty, which the SPD parliamentary group wants to keep; Dieren said the €25 a month "means a hell of a lot" to children in poverty. Our earlier story explains the dispute over cutting basic-income rates.

How little room there is#

Merkur set out the arithmetic that frames all of these fights. The 2027 draft provides for €555.4 billion in spending and €118.7 billion of new borrowing in the core budget, rising to almost €204 billion including the special funds for infrastructure and the armed forces. The autumn tax estimate added €3.9 billion, but because better growth forecasts reduce the borrowing the debt brake allows by €2.5 billion, the coalition is left with about €1.4 billion of room, according to the same report. An electricity tax cut for all would cost several times that.

The longer-term outlook is tighter still. Merkur reported an uncovered financing gap of about €115 billion for 2028 to 2030, and noted criticism of Klingbeil's plan to push back repayment of pandemic-era debt from 2028 to 2033. Heidelberg constitutional-law professor Hanno Kube was quoted as saying the minister was contributing to "the further increase of public debt" and fitting into "a very worrying overall picture." Klingbeil said in October, as reported by Tagesschau, that "for 2027 we gain no new room overall, but we also don't have to close any new gaps," and that the federal budget must keep consolidating.

The positions line up roughly along party lines but not entirely. The Union leadership wants relief for electricity users and rejects the plastic tax, while some of its MPs reject the sugar tax that their own leadership defends. The SPD resists welfare cuts and asks the Union to name offsets for its tax proposals. For where the parties sit more broadly, see the CDU and SPD profiles and the Germany party spectrum, which presents dated editorial estimates rather than measured scores.

The opposition's case#

The opposition parties have not yet commented on the Bereinigungsvorlage in sources we could verify. The Greens have their own route to the electricity tax cut: their Bundestag bill, Drucksache 21/5320, would cut the tax to the EU minimum for all consumers. The bill argues that low-income households are hit hardest by energy prices, that the coalition promised the cut "for all" in its coalition agreement, and that cheaper power would speed up electrification. We found no verifiable statements this week from the AfD or the Left on the ministry's changes, and we will add their responses if they are published before the committee meets.

The committee votes on Thursday and the Bundestag in late November#

The budget committee holds the clean-up session on Thursday. According to Deutsches Ärzteblatt, citing the Bundestag's information service, the session is expected to run into Friday morning, with every section of the budget called up in turn. The committee will also finish its work on the 2027 budget accompanying law, which carries several of the savings measures. The full Bundestag is scheduled to adopt the budget in the sitting week of November 23 to 27.

1. 2026-11-09Coalition leaders meet to settle open disputes, Bild reported
2. 2026-11-10Politico Europe publishes the ministry's cover sheets
3. 2026-11-12Clean-up session begins, expected to run into Friday morning
4. 2026-11-23Sitting week for the Bundestag's final budget vote begins

Source: Deutsches Ärzteblatt, Merkur

Several questions remain open. The cover sheets we read do not show whether the coalition has found an offset for an electricity tax cut, whether the plastic tax revenue stays in the plan, or what happens to basic-income rates and the child supplement. Those decisions may arrive as separate coalition amendments during Thursday's session rather than in the ministry's document. The pension increase for 2027, which we reported is projected at around 4 percent, also feeds into the labor ministry's budget but is set by a separate process.

How we reported this#

We read the Finance Ministry's cover sheets for the labor, health, defense and general finance sections in the PDF published by Politico Europe on November 10 and took every old and new amount in the chart from those pages; figures are in thousands of euros in the original and are rounded to billions here. Unemployment and loan figures for 2026 come from n-tv's reporting on the same document. Fiscal-space figures come from Merkur's reporting, which cites Bild, Reuters and ZDF; we could not check the underlying ministry calculation.

Differing perspectives

Should Germany's coalition cut electricity tax to the EU minimum for all consumers in the 2027 budget?

Each position is summarized as its supporters make it, with equal weight and in alphabetical order. A summary is not an endorsement; the evidence for each is weighed in the story above.

• Cut it for all to speed electrification

  Who holds it: Alliance 90/The Greens parliamentary group

  The Greens' bill would cut the tax to the EU minimum for every consumer. It argues that low-income households spend a larger share of income on energy and are hit hardest by price shocks, that the coalition broke its promise of an immediate cut for all, and that cheaper power would speed up the shift away from fossil fuels in heating and transport.

  In their words: German Bundestag, Drucksache 21/5320 ↗

• Cut it for everyone now

  Who holds it: Chancellor Friedrich Merz, CDU/CSU leadership, Union finance spokesman Fritz Güntzler

  Supporters say the coalition agreement promised a cut for all, not only for industry and farming, and that households should see relief of roughly €5 to €10 a month. A government spokesman said the political will to do it exists. Güntzler said that because the chancellor set the goal, he was fairly sure a way to pay for it would be found before the clean-up session.

  In their words: Tagesschau (ARD) ↗

• Only with a named offset

  Who holds it: Finance Minister Lars Klingbeil (SPD), SPD parliamentary group

  Klingbeil says the autumn tax estimate created no new room for 2027, because growth reduces the borrowing the debt brake allows. He argues the budget must keep consolidating to protect future room for action, and that anyone proposing measures such as cutting electricity tax should say at the same time how they would be financed, rather than adding a cost of about €5 billion a year.

  In their words: Tagesschau (ARD) ↗

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