Germany's government deficit breaches Maastricht limit in H1

The German government's financial deficit reached 3.1% of the gross domestic product in the first six months of 2026, surpassing the 3% reference value defined by the Maastricht Treaty.

The general government's net borrowing amounted to €71.3 billion ($83.1 billion) during the first half of the year, according to provisional data from the Federal Statistical Office (Destatis) on Tuesday.

Destatis reported that the financial deficit grew by €36.6 billion compared to the same period of the previous year.

The central government contributed significantly to this shortfall with a deficit of €48.1 billion, representing an increase of €29 billion from a year earlier.

State governments also widened their financial gap by €3.5 billion to reach a deficit of €6.5 billion in the first half of 2026.

Local governments managed to reduce their shortfall by €1.5 billion, recording a deficit of €14.8 billion.

Social security funds posted a €1.8 billion deficit, shifting from a €3.8 billion surplus in the first half of 2025 due to higher healthcare expenses.

Total general government spending jumped by 6.1% to €1.14 trillion, outpacing revenue growth.

Government revenues increased by 2.8% to €1.07 trillion, driven largely by a 4.6% rise in social contributions.

The government increased its subsidy payments by 10.1% to €25.8 billion, primarily to fund renewable energy and battery technology research.