The debt counter is ticking higher and higher, and with it the interest is accumulating. In the case of Poland, these are exceptionally high compared to the EU average. This is shown by the latest data published on Monday by the European statistical office.
“In most EU countries for which data were available, the cost of public debt increased slightly or remained stable in 2024-2025,” Eurostat reports.
See also: Poland's budget is tight. Are we facing cuts in social programs and tax increases?
He enumerates that the highest cost of gross government debt among the countries for which data was available was reported by Romania (5.2%), followed by Poland (4.5%)..
The next countries on the list, such as the Czech Republic and Italy, record significantly lower debt servicing costs (approx. 3%). The lowest burden is in Ireland (1.4%).followed by Luxembourg (1.5%), the Netherlands (1.7%), Germany (1.8%) and France, Finland and Sweden (1.9% each).
Estimated cost of debt in EU countries
|
Eurostat report
In Poland, in 2025 the cost of debt increased compared to 2024. However, seven EU countries could boast of a decline in the ratio. This was most visible in Estonia (-0.8 percentage points).Sweden (-0.3 percentage points) and Croatia (-0.2 percentage points).
Debt costs. How does Eurostat calculate it?
Eurostat uses the “apparent cost of general government gross debt” in its calculations – an indicator that determines the average effective interest rate on the entire state debt in a given year.
|
Eurostat report
The word “apparent” comes from the fact that this ratio does not reflect the market cost of new debt at any given time. Instead, it shows the average historical cost. The entire state debt consists of financial instruments (e.g. treasury bonds) issued in different years for very different periods (e.g. 2, 5, 10 or 30 years). Some of the debt may have been incurred in times of zero interest rates (it will be very cheap), and some of it may have been incurred in times of high inflation (it will be very expensive). This indicator “mixes” old and new interest rates, giving a real picture of how much it costs the state budget to service existing liabilities at a given moment.
Why is this indicator important? Shows the estimated debt burden on the budget. A country may have a huge nominal debt (e.g. Japan or Italy), but if its Cost is low, the annual maintenance of this debt does not excessively burden the state finances.
Signals trends. If the rate increases from year to year (which is currently the case in Poland and Romania), it means that the old, cheap bonds expire and the state must issue new, much more expensive interest-bearing debt securities.
