Rising state quota in Germany: Federal Ministry of Finance expects new highs

Chancellor Friedrich Merz (CDU) took the rare opportunity to praise himself and his government. On Wednesday evening he stood with Siemens boss Roland Busch and rebelled in front of the cameras with Deutsche Bank CEO Christian Sewing. In Berlin they promoted the “Made for Germany” initiative, which is about private investments in Germany. “The competitiveness of our location must improve,” said Merz, and it is a good thing that the Federal Cabinet was able to agree on “a comprehensive reform of long-term care insurance” today.

Highest state quota since 1960

How necessary these and other corrections are, such as pensions and health, which are intended to reduce government spending, can be seen when looking at previously unpublished figures. According to them, the German state is spending more and more on social services, personnel and subsidies in relation to economic output. This emerges from internal documents from the Federal Ministry of Finance, which are available to SPIEGEL: The federal government has already put the so-called state quota internally at 52 percent for this year, and it is expected to rise to 52.4 percent in 2027.

Until now, Lars Klingbeil's (SPD) ministry had expected a state quota of 51.4 percent for this year and 51.5 percent for next year. According to the calculations, Germany would have the highest government quota since 1960 - and would break the previous record from 2021 (51.1 percent). At that time, the pandemic caused unusually high government spending. In the paper, the Ministry of Finance compares Germany's values ​​with those of other European countries: According to this, the Federal Republic is approaching the top group, which is led by record holders Finland (58.9 percent) and France (57.4 percent).

The state quota includes, among other things, the extensive investments in infrastructure and climate protection through the special fund that Chancellor Merz pushed through with his party, the SPD and the votes of the Greens in the previous Bundestag at the beginning of 2025. It will flow in the coming years and drive up the state quota. How much taxes and duties play a role can be seen by looking at the ratio of these expenditures to economic output, the so-called tax and duty ratio, sometimes also referred to as the fiscal ratio. According to the BMF's internal documents, the tax rate is 39.4 percent - a record level since 2025.