Germany news: Federal Cabinet approves draft 2027 budget

The budget draft provides for more borrowing than initially planned, as well as a big increase in defense spending. Meanwhile, three men are facing trial over a massive stash of illegal weapons. Follow DW for more.

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Lars Klingbeil speaking to Friedrich Merz
New borrowing in 2027 is expected to total more than €200 billionImage: Marco Bader/HMB Media/picture alliance

Skip next section What you need to know

What you need to know

  • Germany’s federal Cabinet has approved the draft budget for 2027
  • Three men are standing trial over the discovery of one of Germany’s biggest-ever illegal weapons caches
  • German companies see democracy as crucial for economic success but fear it’s being weakened, according to a survey

Read on for a roundup of the headlines from across Germany on Monday, July 6:

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Skip next section German cabinet approves 2027 draft budget07/06/2026July 6, 2026

German cabinet approves 2027 draft budget

The coalition cabinet of Chancellor Friedrich Merz has approved his defense-heavy budget proposal for 2027, which will now go to parliament for final approval.

The draft includes a one-third increase on defense spending, up from €82.2 billion ($94 billion) in 2026 to nearly €110 billion ($126 billion) in 2027.

After a long period of austerity under former Chancellor Angela Merkel (also of Merz’s CDU party) this new budget allows for up to €203.6 billion in borrowing in order to, in part, repair and replace Germany’s dilapidated infrastructure and outdated military equipment.

https://p.dw.com/p/5GfJ3Skip next section Germany’s Klopp, DFB, others blast FIFA for overturning US striker’s suspension07/06/2026July 6, 2026

Germany’s Klopp, DFB, others blast FIFA for overturning US striker’s suspension

United States' Folarin Balogun (20) fouls Bosnia's Tarik Muharemovic (4) during the World Cup round of 32 soccer match between the United States and Bosnia in Santa Clara, Calif., near San Francisco, Wednesday, July 1, 2026. Balogun received a red card on the play.
Thomas Tuchel said he believed it was a harsh red card, but also that he couldn’t understand the basis for revoking the call once it was madeImage: Jeff Chiu/AP Photo/picture alliance

German football officials have criticized FIFA for the apparent political decision to overturn the suspension of star US striker Folarin Balogun in time for tonight’s World Cup match against Belgium in the round of 16. 

Bernd Neuendorf, president of the German Football Association (DFB), said that FIFA should “now issue a prompt statement regarding reports that the decision to overturn the red card … was preceded by a telephone call between US President Donald Trump and FIFA President Gianni Infantino.” 

Neuendorf said that the “impression that there has been active political interference in sport must be dispelled swiftly and conclusively,” adding that the “integrity of the competition and the credibility of FIFA are at stake.” 

The incoming heir apparent as German national team coach, Jürgen Klopp, said it would be “madness” and it would call “everything into question” if Trump and Infantino really collaborated on the call. 

“These two people, who know nothing about football, should have absolutely nothing to do with this,” he said. “This is our sport, not theirs.” 

England’s manager Thomas Tuchel, who is also German, was keen to stress that he did not believe Balogun should have received a straight red card for the foul. 

“But VAR got involved and obviously three people from VAR and the referee checked it, were then of the opinion that it was a red card. So, it’s a decision that’s made,” Tuchel said. “Who overturns this decision and when? And on what grounds? And… how far does this go now? So it’s just strange for me. We just have to have consistency in the decisions.” 

It’s very rare, but not unheard of, for red card suspensions to be overturned in the midst of a World Cup. In 1962, Brazilian star Garrincha was meant to miss the final after a straight red card in the semi. But hosts Chile launched a successful appeal against his ban — even though he’d been sent off for a retaliatory foul against a Chilean in the 4-2 semifinal win — and he was allowed to contribute to Brazil’s 3-1 victory over Czechoslovakia.

https://p.dw.com/p/5GfB7Skip next section Merz tells Trump NATO figures not accurate07/06/2026July 6, 2026

Merz tells Trump NATO figures not accurate

Elizabeth Schumacher

German Chancellor Friedrich Merz has told US President Donald Trump over the phone that recent figures the latter cited to criticize Germany’s defense spending were outdated, according to news agency DPA.

Government sources said that the pair had recently spoken over the phone after Trump called the defense budgets of several NATO member states “ridiculous,” and singled out Germany in particular.

The clarification reportedly took place on Friday, when Merz called Trump to congratulate him on the 250th anniversary of US independence.

Germany has already put plans in place to make defense spending 3.5% of GDP by 2029, far ahead of the 2.5% minimum member states are supposed to meet. A nearly €110 billion defense budget is planned for 2027, a major increase on the year before.

A major NATO summit is being held in Ankara, Turkey, on Tuesday.

https://p.dw.com/p/5Gf46Skip next section Remscheid weapons trial begins with confession07/06/2026July 6, 2026

Remscheid weapons trial begins with confession

A defendant holds a file over his face in the Wuppertal court
The trial began on Monday in the western city of WuppertalImage: Rolf Vennenbernd/dpa/picture alliance

The court case over a massive stash of illegal weapons discovered last October in Remscheid, western Germany, has started with a confession.

Three men, aged 60, 38 and 35, are standing trial in the Wuppertal Regional Court, accused of various offenses under the War Weapons Control Act. They face up to 10 years in prison. 

Prosecutors allege the 60-year-old defendant stored hundreds of weapons at his home that he sought to sell illegally. The 38-year-old allegedly bought some weapons from him, before reselling them on to others, together with the third defendant. 

“My client admits the charges. The indictment is accurate in that respect,” the defense lawyer for the 35-year-old said at the start of the trial, according to German press agency dpa.

The lawyer representing the 38-year-old said his client was “in principle prepared to give evidence.”

Presiding judge Alexander Schräder said that, in the event of full confessions, the court would consider a prison sentence of seven to eight years to be appropriate for the main defendant. He said a proportionate sentence for the 38-year-old would be three to four years and two to three years for the 35-year-old. 

As proceedings got underway earlier on Monday, Chief Public Prosecutor Daniel Müller spent almost an hour reading out the full list of items found in the main defendant’s home in Remscheid, from machine guns to anti-tank weapons, rifles and silencers.

https://p.dw.com/p/5GeXYSkip next section CDU workers’ wing calls for sick note plan to be scrapped07/06/2026July 6, 2026

CDU workers’ wing calls for sick note plan to be scrapped

The workers’ wing of the ruling conservative Christian Democratic Union (CDU) has urged the coalition government to withdraw plans that would require employees to provide their workplace with a doctor’s note from the first day of their illness.

“There is huge discontent about this. The coalition must quickly put this completely unnecessary issue to rest,” Christian Bäumler, deputy chairman of the Christian Democratic Workers’ Association (CDA), said in comments published by Berlin’s Tagesspiegel newspaper.

“The coalition should turn its attention to other issues instead of sending a signal to the people of Germany that it mistrusts them,” he added.

Last week, the coalition government — made up of the CDU/CSU and center-left Social Democratic Party (SPD) — proposed changes to sick leave rules in a bid to reduce absenteeism.

They also scrapped the possibility of obtaining a doctor’s note over the phone — a measure introduced during the coronavirus pandemic. 

The exact details of the sick leave changes are yet to be ironed out.

Under the current rules, a doctor’s certificate is only required if a person is sick for more than three days, although employers are entitled to ask for one earlier. The changes would legally obligate employees to present a certificate on day one instead.

Bäumler said there was no need to introduce new legislation, noting that “GP waiting rooms are already mostly overcrowded.”

https://p.dw.com/p/5GeQiSkip next section TKMS sub contract would bring Canada closer to Europe, German official says07/06/2026July 6, 2026

TKMS sub contract would bring Canada closer to Europe, German official says

The logo of TKMS
Germany’s TKMS is vying for a submarine deal with Canada Image: Christian Charisius/dpa/picture alliance

A German government official has said that if Canada decides to buy German submarines instead of South Korean ones, it would bring Ottawa closer to Europe for decades into the future.

German warship builder Thyssenkrupp Marine Systems (TKMS), ​along with partner Norway, are competing with South Korean ⁠shipbuilder ​Hanwha Ocean for the contract to build 12 submarines.

Canadian Prime Minister Mark Carney is expected to announce the winning bidder on Monday, shortly before he heads to a NATO leaders’ summit in Turkey, the Globe and Mail reported.

The German official said a win for TKMS would be a good starting point for strategic cooperation and “would have a genuine transatlantic dimension.”

The official added that German Chancellor Friedrich Merz has invested a significant amount of political effort toward the deal in recent months. 

“We’ll see in the coming days whether this effort bears fruit,” the official said.

TKMS is one of the world’s leading companies in the construction of non-nuclear-powered submarines.

https://p.dw.com/p/5GdltSkip next section German factory orders rebound in May07/06/2026July 6, 2026

German factory orders rebound in May

Germany‘s struggling manufacturing sector showed signs of recovery in May, with factory orders rebounding stronger than expected after a decline in April.

New business rose by 1.9% in May compared with the previous month, figures from the Federal Statistical Office showed. 

The recovery is mainly thanks to a jump in large-scale transport orders, including aircraft, ships, trains and military vehicles. These orders were 85% higher than the previous month due to several major contracts.

“Incoming orders in the manufacturing sector appear to have resumed the upward trend that began in the second half of 2025,” said the Economy Ministry in a statement.

It also warned that “developments remain highly volatile,” adding that “geopolitical uncertainty remains elevated until peace negotiations between the United States and Iran are finally concluded.”

The war in the Middle East, higher oil and gas prices and economic uncertainty had previously dampened demand.

“Up one month, down the next — the zigzag in orders continues,” said Alexander Krüger, chief economist at ABN Amro Germany. “All in all, the order situation is better than it was a year ago.” 

Thomas Gitzel, chief economist at VP Bank, urged caution.

“These are not easy times for the German economy,” he said. “The automotive industry is undergoing downsizing, creating difficulties for many supplier industries. This is particularly true of the mechanical engineering sector. Although it recorded an increase in orders in May, the overall picture remains bleak.”

https://p.dw.com/p/5Gdc4Skip next section Germany’s top diplomat suggests Iran should pay for Hormuz mine clearance07/06/2026July 6, 2026

Germany’s top diplomat suggests Iran should pay for Hormuz mine clearance

Ships in the Strait of Hormuz
Clearing mines from the Strait of Hormuz is expected to take several weeksImage: Wen Xinnian/Xinhua/IMAGO

German Foreign Minister Johann Wadephul has raised the possibility of Iran helping to pay for a potential European mission to clear mines from the Strait of Hormuz.

“Iran has unlawfully mined an international shipping lane,” Wadephul told the Handelsblatt newspaper.

He said Tehran should foot the bill, given that the damage was caused by the regime.

Wadephul added that, although Germany currently had no plans to seek fees for the European mission, such a measure would be justified.

Shipping activity through the Strait of Hormuz — a major waterway for the transport of oil, gas and fertilizer — has picked up in recent days. But there are still some 80 naval mines around the central part of the strait, according to the International Maritime Organization.

Experts have said that clearing the mines is a complex task that could take several weeks.

A decision on Germany’s participation in the mine-clearning operation is expected to be made before the end of the summer.

https://p.dw.com/p/5GdG1Skip next section Democracy important for business location, say companies in Germany07/06/2026July 6, 2026

Democracy important for business location, say companies in Germany

Companies in Germany believe democracy is the foundation for economic success, according to a survey of about 900 firms by the Bertelsmann Foundation, German Economic Institute and the University of St Gallen.

At the same time, many companies said they feared democracy was weakening amid growing social polarization and loss of trust in democratic institutions.

Some 93% said democracy was key in Germany as a business location, with advantages such as the rule of law, planning certainty and entrepreneurial freedom.

More than 90% said they saw lack of trust in democratic institutions as a threat.

Around 30% said social divisions had also seeped into their companies and were taking a toll on the working environment.

“Social tensions do not stop at the factory gates,” said Dominik Hierlemann of the Bertelsmann Foundation. “Yet the vast majority of companies are able to deal with this effectively. They help to stabilize democracy.”

The survey also showed that companies are increasingly reflecting on “whether political engagement is becoming riskier under changing geopolitical or domestic political conditions.”

For instance, around 21% of those surveyed said they would expect to face disadvantages for taking a stand against political forces in Germany aligned with US President Donald Trump.

Around 60% of companies said they also see themselves as having a democratic responsibility. Many take action internally, for example, by highlighting democratic values in their mission statements.

“Public stances are significantly less common and, above all, controversial among smaller companies,” Bertelsmann said.

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https://p.dw.com/p/5Gd5TSkip next section Trial over Remscheid weapons cache to open07/06/2026July 6, 2026

Trial over Remscheid weapons cache to open

Guns and ammunition in plastic bags
Police uncovered almost 100,000 rounds of ammunition and hundreds of firearmsImage: Marc Herwig/dpa/picture alliance

Three men are standing trial after the discovery of a huge stash of illegal firearms in the western city of Remscheid last year.

The defendants, aged 60, 38 and 35, have been charged with breaching the War Weapons Control Act, according to court documents cited by German press agency dpa.

The 60-year-old is accused of storing weapons and ammunition for sale. He allegedly sold six submachine guns and a revolver to his 38-year-old co-defendant, who then allegedly resold some of the weapons together with the 35-year-old.

Police conducted raids in central Remscheid in October 2026 after undercover officers were offered weapons for sale.

They found almost 100,000 rounds of ammunition, as well as around 300 firearms, including 125 machine guns, 67 submachine guns, 51 pistols, 32 long guns, 11 revolvers and 13 anti-tank weapons.

The public prosecutor’s office said it was one of the largest discoveries of military-grade weapons in recent German history.

The prosecutor’s office has accused the 60-year-old of dealing in war weapons on a large scale, but he claims most of the arms are part of his private collection and that he had no intention of selling them.

Ten days of hearings are scheduled in Wuppertal until the end of September. 

https://p.dw.com/p/5GcxzSkip next section German Cabinet to approve draft for 2027 budget07/06/2026July 6, 2026

German Cabinet to approve draft for 2027 budget

The federal Cabinet is set to approve the government’s draft for the 2027 budget on Monday.

The government plans to spend €555.4 billion ($634.8 billion) next year, significantly more than the current year’s €524.5 billion.

New borrowing is expected to total more than €200 billion, according to the draft seen by news agencies. That would be a bigger increase than initially planned.

A significant spending boost is planned for the Bundeswehr, Germany’s armed forces. The draft includes around €109.7 billion for defense— about a third more than the 2026 budget.

Total investment will be €117.5 billion, almost €40 billion more than originally planned. This increase comes after the approval of a €500 billion fund for infrastructure and a rule change that allows ​defense spending to be excluded from debt limits.

Social Democrat leader and Finance Minister Lars Klingbeil defended the planned increase in new borrowing.

“You cannot defend yourself against Putin with a balanced budget,” he told public broadcaster ARD on Sunday, referring to the Russian president and his war in Ukraine.

Budget discussions are set to commence in parliament in September after the summer recess. Final approval is expected by the end of the year.

https://p.dw.com/p/5GcgKSkip next section Welcome to our coverage07/06/2026July 6, 2026

Welcome to our coverage

Kieran Burke Editor | Natalie Muller

Guten Morgen from the DW newsroom on the banks of the Rhine River in Bonn.

You join us as Germany’s Cabinet is expected to approve the first draft of the 2027 federal budget.

The draft envisages higher levels of debt and spending than originally planned, with a particular boost for defense.

Meanwhile, three men are set to stand trial over the discovery of one of Germany’s largest illegal arms caches in the western city of Remscheid.

Follow us for updates on these stories and more from across Germany!

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