Germany, the largest economy in the Eurozone, is plunging further into a debt crisis. Despite relatively low interest rates and a not fully recessed European economy, Germany struggles to maintain a stable budget without resorting to accounting tricks, shadow budgets, and so-called special funds. This precarious fiscal situation raises serious doubts about Europe’s capacity to engage in conflicts like the one with Russia without relying heavily on U.S. support.
The 2024 supplementary budget reveals a planned increase in new debt by €11.3 billion, totaling €50.3 billion. The German cabinet is set to approve this budget along with the 2025 draft budget, the financial plan until 2028, and a significant economic package on July 17. These plans include a record €78 billion investment in 2025, highlighting Germany’s financial challenges and strategic priorities.