Cuts to spending on health and increases in the relevant contributions from 2027 is proposed by the central bank of the largest euro -zone economy, Germany (Bundesbank) in order to be able to withstand the burden of increasing defense spending by vehicle relaxing the debt brake, voted by the country in March 2025.
The original … idea fell for the first time publicity by his secretary -general NATO, Mark Rutte when he said in June 2025 (a few days before the NATO summit) How “if you don’t go to 5%, including 3.5% of basic defense spending, you could still have the National Health System, or in other countries, their health systems, the pension system, etc., but you better learn to speak Russian. That is, this is consistency. “
Subsequently, in July 2025, before the Bundesrat, German Chancellor Friedrich Mertz, the first … teaching of European leaders in defense expenditure, directly linked public debt to growth due to rising defenses. (17.9.25) From the federal Parliament (Bundestag), during the budget debate (approved on 18.9.25), it became more specific…
In crisis the health insurance
Yesterday there was another “bomb”. This time from the Bundesbank and specifically from its report on September 2025.
There is a separate chapter on the state budget -spending relationship for health. This chapter is divided into two sub -chapters. The one for “Mandatory Health Insurance” and another for “Social Security of Long Care”.
For compulsory health insurance it is stated that: “The Health Fund is expected to close with a small deficit. Based on the provision of the Group of Appraisers and the payments of the Fund to the Innovation and Hospital Structures, a deficit of approximately € 1 billion was recorded in the budget. A federal loan of 2.3 billion euros is aimed at ensuring that the Fund’s reserves will not fall below the legal minimum.
Health Insurance Funds have invested surplus despite a significant increasing expenditure for benefits, due to the sharp increase in supplementary contribution rates. On average, the Funds increased the rate of complementary contribution by 0.4 percentage points more than calculated by the Federal Ministry of Health. This will lead to additional revenue of 5.5 billion euros compared to the government’s estimate. Overall, a surplus is expected – although health insurance costs in 2024 was about 2 billion euros higher than estimates, and the cost of spending, given the evolution to date, is probably above estimated estimates (+7%). However, it remains to be seen whether this surplus will be enough to replenish financial reserves at the minimum level. “
And adds that ‘The upward pressure is mitigated by the following:
- First, according to the draft budget, the federal government will provide an additional € 2.3 billion loan in 2026.
- Secondly, the federal government postponed a loan of 1 billion euros from 2023 to 2033. Initially it was to be repaid in 2026. The federal government thus bridges acute liquidity problems with its many years of loan.
However, Structural funding gaps cannot be filled with such loans.
Therefore, a committee is going to develop reform proposals by the spring of 2027.
Structural reforms and improvements in efficiency could limit the tendency to a sharp increase in spending on health insurance benefits.
Awareness of costs between insured persons can also be strengthened, for example through a type of medical fee or certain deducted amounts. “
In crisis and the care of the elderly
In terms of “Social Security of the Elderly”, Bundesbank points out that “Expenditure is expected to continue to grow strongly.
Long -term insurance is mainly burdened by demographic funding pressures, but also as a result of the expansion of benefits in the past. Therefore, without reforms, a sharp increase in contributions is expected. According to the draft budget, the federal government will provide a loan of 1.5 billion euros in 2026. This should prevent further increase in short -term contributions. However, upcoming loan repayments to the federal government will further increase financial pressure in the coming years. Therefore, action is required and a reform committee is expected to develop proposals by the end of 2025. This will include, in particular, decisions on the scope of insurance.
A permanent shift in funding to the federal government is out of debate without anti -funding measures. “
The brake of relaxation of… debt brake
Immediately afterwards, Bundesbnak also throws the final… “wire”, pointing out that “Even without new burdens, the federal government’s budget already requires significant consolidation from 2027 onwards to comply with the demands of the loose debt brake.”
It is recalled that the loosening of the debt brake, which was foreseen in the constitutional reform of March 2025, concerns the increase in public lending with the aim of increasing defense spending in the context of the entire EU re -equipment plan and the upgrading of its national contributions.
What does Bundesbank want to say? How to increase public debt increase for the sake of defense costs requires fiscal consolidation, namely cutting health expenditure regardless of the possible burdens of the same insured, eg by increasing their contributions….