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Saxony-Anhalt's debt crisis deepens despite record tax revenues in 2025

A budget built on borrowed time? Critics slam Saxony-Anhalt's financial choices as debt soars—despite historic tax windfalls. Will reckless spending trigger a fiscal meltdown?

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2 min read
The image shows a drawing of a building with a lot of plans on it, which is the floor plan of the...
The image shows a drawing of a building with a lot of plans on it, which is the floor plan of the former office of the German Chancellor of the Federal Republic of Germany. The paper contains detailed drawings and text, providing a comprehensive overview of the building's layout.

"Disastrous Budget Outcome": Taxpayers' Association Slams Saxony-Anhalt's Fiscal Policy – €1.2 Billion in New Debt

Saxony-Anhalt's debt crisis deepens despite record tax revenues in 2025

The Taxpayers' Association of Germany (BdSt) in Saxony-Anhalt has sounded the alarm: the latest figures for the state's 2025 budget paint a bleak picture of its financial health. Despite record tax revenues, the state is sinking deeper into debt than originally planned.

Debt Pile Grows Despite Record Revenue

While other federal states, such as Schleswig-Holstein and North Rhine-Westphalia, have managed to reduce their new borrowing, Saxony-Anhalt is moving in the opposite direction. In 2025, the state took on approximately €1.21 billion in new loans—some €80.7 million more than budgeted. The irony? Tax revenues actually hit a record high of €10.4 billion.

The BdSt sharply criticizes the state government's justification, which has repeatedly cited an "emergency situation" since 2020 to bypass Germany's debt brake. The association dismisses the continued use of this argument—particularly the claim that the state is still grappling with the aftermath of COVID-19 in 2026—as "nonsense."

The Interest Trap Snaps Shut

The long-term outlook is grim, according to the BdSt. By 2029, the state's total debt is projected to balloon to around €27.6 billion.

This trajectory risks locking Saxony-Anhalt into a dangerous downward spiral of rising interest payments. In 2026, interest expenses are forecast at €420 million—but by 2029, they are expected to surge to at least €661 million.

At that point, nearly all of the new debt taken on in 2029 would be consumed by interest payments alone.

"Self-Inflicted Problems" and a Lack of Fiscal Discipline

The criticism leveled at the black-red-yellow coalition is severe: the government is accused of depleting reserves during economic boom years while pursuing an overly expansionary spending policy. Though 2025 saw isolated austerity measures, such as a hiring freeze, there is no comprehensive, structured plan to rein in expenditures.

Worse still, the 2027 financial plan reveals gaping holes: even beyond the planned borrowing, an additional €1.5 billion is missing to balance the budget.

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