Germany's 2027 Budget, NATO Row with Trump, and Top Stories

Germany’s cabinet approves a defense-heavy 2027 draft budget

Germany’s coalition cabinet, led by Chancellor Friedrich Merz, approved a draft federal budget for 2027 on July 6, 2026, that lifts defense spending by roughly one third and clears the way for a significant expansion of federal borrowing, DW reported. Defense spending is set to rise from €82.2 billion in 2026 to nearly €110 billion ($126 billion) in 2027, a figure the government has framed as central to repairing military readiness and replacing aging equipment. The draft now goes to the Bundestag for final approval.

The budget permits up to €203.6 billion in new borrowing, a sharp break from the long stretch of austerity associated with former Chancellor Angela Merkel, also of Merz’s CDU. Officials have tied the borrowing room to two priorities: rebuilding Germany’s dilapidated infrastructure and modernizing military matériel that critics have described as underfunded for years. The fiscal shift comes alongside a separate German commitment to lift defense spending to 3.5% of GDP by 2029, well above the 2.5% floor NATO members are formally required to meet.

Merz and Trump clash over NATO burden-sharing

The budget backdrop fed directly into a diplomatic exchange with Washington. DPA reported that Merz called US President Donald Trump on July 3, the 250th anniversary of US independence, and used the call to challenge the NATO figures Trump had recently cited while calling the defense budgets of several allies ‘ridiculous’ and singling out Germany. Government sources told DPA that Merz argued the figures were outdated and pointed to Berlin’s new trajectory toward 3.5% of GDP by 2029.

The disagreement lands at a sensitive moment for the alliance. A major NATO summit opens in Ankara on July 7, 2026, bringing together the heads of state and government of the alliance’s 32 member states. Germany’s spending plans are likely to feature prominently in the Ankara discussions, alongside support for Ukraine and the broader question of how European allies share the security burden with Washington.

NATO summit in Turkey and the political weight for Erdogan

DW’s homepage coverage on July 7, 2026, flags the Ankara summit as the day’s top story, with a 4-minute 10-second video report examining how the gathering could boost Turkish President Recep Tayyip Erdogan. The alliance was founded in 1949 in the aftermath of World War II, and the Turkey meeting is being framed by DW’s report as a moment when host countries can leverage the diplomatic spotlight. The agenda is expected to cover current geopolitical challenges, including the wars in Ukraine and the Middle East and the security of the alliance’s eastern flank.

For Germany, the Ankara summit is the first major test of Merz’s transatlantic posture since taking office. Berlin’s push to communicate its new defense trajectory is partly defensive: it wants to avoid being cast as a free rider in front of the rest of the alliance, even as it argues that the historical baseline Trump has been using misrepresents current German policy.

Canada reportedly picks Germany’s TKMS for submarine deal

Separately, DW’s live blog reports that Canada is expected to award a major submarine contract to Germany’s TKMS, beating South Korea’s Hanwha. The Globe & Mail, citing two unnamed sources, first reported the selection, which is said to be worth tens of millions of euros. An official announcement is not expected until later, leaving room for last-minute changes.

The Royal Canadian Navy has said it needs at least 12 submarines to remain modern and competitive in the face of threats from both Russia and China. The contract has become entangled with wider geopolitics: the European Union has been seeking closer ties with Canada amid a volatile relationship with the Trump administration in Washington. For Berlin, a TKMS win would extend Germany’s naval-industrial reach into North America at a moment when European defense exports are under intense political focus.

DFB and Klopp attack FIFA over Balogun red card reversal

In a separate dispute playing out on a different stage, the German Football Association (DFB), its incoming head coach Jürgen Klopp, and England’s German manager Thomas Tuchel publicly criticized FIFA’s decision to overturn a straight red card issued to US striker Folarin Balogun in time for the US World Cup round-of-16 match against Belgium on July 6, 2026.

DFB president Bernd Neuendorf called on FIFA to ‘issue a prompt statement regarding reports that the decision to overturn the red card was preceded by a telephone call between US President Donald Trump and FIFA President Gianni Infantino.’ He said the ‘impression that there has been active political interference in sport must be dispelled swiftly and conclusively’ and warned that ‘the integrity of the competition and the credibility of FIFA are at stake.’ Klopp, who has been widely reported as the next Germany coach, said any such cooperation would be ‘madness’ and would ‘call everything into question,’ adding: ‘These two people, who know nothing about football, should have absolutely nothing to do with this. This is our sport, not theirs.’ Tuchel, who said he did not think the original foul warranted a straight red, still questioned how a final decision reached after VAR review could be undone. ‘Who overturns this decision and when? And on what grounds? And… how far does this go now? So it’s just strange for me. We just have to have consistency in the decisions,’ he said.

Overturning a red card suspension mid-tournament is rare, but not unprecedented: in 1962, hosts Chile successfully appealed the suspension of Brazil’s Garrincha, who played in and helped win the 3-1 World Cup final against Czechoslovakia after being sent off in the semifinal.

Broader coverage on DW’s homepage

Outside the political and sporting headlines, DW’s July 7, 2026, homepage also surfaces a number of feature stories reflecting the kinds of issues German readers are following. The site flags a ‘Top stories in 90 seconds’ video news roundup, a feature on whether algae-based medical testing could replace animal-based methods, and a ‘A closer look’ package on extreme heat, droughts and wildfires, which it says are becoming more common as global temperatures rise and rain and snowmelt decline. Travel, arts, culture, film and lifestyle pieces round out the day’s front page, but the budget, NATO and submarine stories carry the day’s policy weight.

What to watch next

Three dates and decisions stand out from DW’s reporting. First, the Bundestag must still pass the draft 2027 budget before it can take effect, which will test whether Merz’s coalition can hold together on a roughly one-third defense increase and a borrowing envelope of up to €203.6 billion. Second, the July 7 NATO summit in Ankara will show whether Germany’s new spending trajectory and Merz’s call to Trump are enough to defuse the burden-sharing argument, or whether the dispute carries into the meeting’s final communiqué. Third, Ottawa is expected to confirm formally whether TKMS will build Canada’s next submarine class, a decision with implications for European defense exports and for the EU’s broader courtship of Canada. In the background, FIFA faces a deadline of its own to explain, in Neuendorf’s words, what really happened to Balogun’s red card.