Audit Court: Federal Republic of Germany's Administrative Entity

Unchecked Federal Spending Exceeds Budgetary Limits, According to Audit Office

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2025 September 17 . 10:28 PM

2 min read

Audit Court: Federal Republic of Germany Management

Audit Officer's Findings: The Federation Exceeds Its Financial Means - Audit Court: Federal Republic of Germany's Administrative Entity

The Federal Audit Office has raised concerns about the potential risk of a debt spiral due to the high levels of new debt in the draft 2026 budget. Finance Minister Lars Klingbeil is set to present the budget to the Bundestag next week, with an estimated total of 520 billion euros.

According to the Audit Office's report, the federal government is structurally living beyond its means. The report indicates that the federal government's debt levels could potentially lead to a debt spiral, and a significant portion of the 2026 budget will be tied up in interest payments in the medium term.

The report criticises the plan to finance approximately one-third of the 2026 budget on credit as a poor financial policy. In the core budget alone, Klingbeil plans to incur around 90 billion euros in new debt in 2026, while the total new debt, including loans from special funds, is estimated to be around 174 billion euros.

The Audit Office's findings are based on the analysis of the 2026 budget draft, and the report does not specify the exact nature or extent of the financial mismanagement alleged. However, the Federal Audit Office has accused Finance Minister Lars Klingbeil of driving the federal government into a debt spiral.

The report's findings could prompt calls for reforms in the federal government's budgeting and spending practices. The Audit Office suggests that core state tasks cannot be permanently financed from revenues, and the federal government may be unable to sustain its current spending levels.

The Federal Audit Office's accusations could potentially have significant implications for the financial stability of the federal government. As the report indicates, the rising federal spending is not being matched by a proportional increase in the federal government's ability to perform, and the Audit Office warns of the risk of a debt spiral due to the high levels of new debt in the 2026 budget.

The report's findings are currently under scrutiny by the Audit Office, and it remains to be seen what actions will be taken in response to the report's findings. However, the potential risk of a debt spiral has raised concerns among lawmakers and financial experts, and the 2026 budget draft is under increasing pressure to address these issues.