Financial expansion plan unveiled - The MV administration proposes draft budget - Rise in Spending - Draft budget proposal unveiled by MV Government
The state government of Mecklenburg-Vorpommern has announced its budget for the next two years, with a total of approximately 11.7 billion euros for 2026 and 11.8 billion euros for 2027. The draft budget, which is set to go before the state parliament in September, comes amidst economically and financially challenging times.
In a bid to meet spending cuts on a global scale, the state has committed to saving a total of 128 million euros within the global reductions. To achieve this, Mecklenburg-Vorpommern will draw on reserves, taking 70 million euros from the state's regular savings fund in 2026 and 112 million euros in 2027.
Education is a key focus area in the budget, with expenditures for education set to increase by 100 million euros in 2027, ensuring that every sixth euro from the state budget goes towards education. This includes costs for schools, vocational training, and higher education institutions.
Infrastructure development is another priority, with funds from the Infrastructure Special Fund being invested to address deficits in school and road construction. This will provide around 2 billion euros over twelve years, an increase of about ten percent compared to the state's planned investments.
However, the opposition CDU has criticised the budget draft, claiming it is a financial bankruptcy declaration. They argue that all free reserves will be exhausted from 2028 onwards, leading to a budget gap of around 1.1 billion euros per year.
Personnel costs are the main driver of the state's expenses, which will exceed 3 billion euros for the first time in 2027. Despite the tight budget situation, no parent fees will be charged for kindergarten and after-school care in the future.
Investments from federal funds are often allocated for infrastructure development, digitalization, and other investment projects supporting education and public services. However, the exact allocation amounts and plans for federal fund investments in the 2026 and 2027 budget draft of Mecklenburg-Vorpommern are not yet available.
The budget discussions have taken place against a backdrop of lower population numbers and weak economic development, resulting in revenues falling significantly short of projections. Social expenditures are continuing to rise, to 1.7 billion euros in 2026 and then 1.75 billion euros in 2027.
The budget draft will go to the state parliament as the legislator, with the parliament likely dealing with it in the first reading in September. The new double budget could be decided by the end of 2025. The state government has also announced that it will meet the requirements of the debt brake with the new double budget, but will make use of the newly created structural component, allowing for loans of 277.5 million euros per year. These loans will be used for various projects, including broadband expansion, school, university, and road construction.
In response to criticism from the AfD faction, the budget draft addresses the lack of real incentives for innovation, digital transformation, craftsmanship, and apprenticeships in the economy. However, the specific measures to address these concerns are yet to be detailed.
For those seeking more detailed budget information, including exact allocation amounts to education sectors, personnel cost projections, and federal fund investment plans, it is recommended to consult Mecklenburg-Vorpommern's official state government website or finance ministry press releases, or public budget hearings or draft budget proposals published by the state government closer to or during 2025 and 2026.
The state government's commitment to saving 128 million euros within global reductions includes allocations from the state's regular savings fund for vocational training, but the specific measures to foster innovation, digital transformation, craftsmanship, and apprenticeships in the economy are yet to be detailed. The budget draft also includes investments from federal funds for infrastructure development, education, and public services, but the exact allocation amounts and plans are not yet available.
