“Greece will no longer be the most indebted country in the eurozone,” claims a government official in Athens
Greece will no longer be the most indebted country in the euro zone, the public debt will fall below that of Italy by the end of this year, writes the international press citing sources and data from Italy's new budget plan.
Italy will surpass Greece in public debt. Archive photo
Greece's debt is expected to fall to about 137 percent of gross domestic product this year, down from 145 percent in 2025, two senior officials told Reuters.
In contrast, Italy's debt will rise from 137.1% of GDP in 2025 to 138.6% in 2026, according to the Treasury's multi-year budgetary plan (MFF).
“Greece will no longer be the most indebted country in the Eurozone – starting this year”one of the two Greek officials told Reuters.
The new estimate of Greece's debt ratio will be included in the country's new multi-year fiscal plan, which will be presented to the European Commission later this month.
Italy's debt will remain broadly stable at 138.5% in 2027, before falling to 137.9% in 2028 and 136.3% the following year, the budget plan shows.
Since 2020, Greece's public debt – the highest in the eurozone in two decades – has fallen by more than 45 percentage points, reaching 145% of gross domestic product last year. Italy reduced its debt by around 17 percentage points over the same period.
Greece, recovering from a decade-long financial crisis and three bailouts totaling about 280 billion euros, plans to repay about 7 billion euros worth of loans early from its first bailout phase at the end of the year.
The least indebted countries in the euro area
According to figures provided by Eurostat, at the end of the fourth quarter of 2025, Greece had the highest public debt ratio in the euro area at 146.1% of GDP, closely followed by Italy at 137.1%.
Other highly indebted nations included France at 115.6%, Belgium at 107.9% and Spain at 100.7%.
In contrast, the lowest debt-to-GDP ratios were observed in Estonia at 24.1%, Luxembourg at 26.5%, Denmark at 27.9% and Bulgaria at 29.9%.
It is important to note that debt is usually measured as a ratio of public debt to GDP, rather than in absolute terms.
Therefore, larger economies such as Germany may have substantial total debt, but their debt-to-GDP ratios are generally more moderate than those of southern European countries.
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Greece's public debt had reached 210% in 2020
In 2010, Greece's public debt was around €330 billion, or nearly 148% of GDP. The situation deteriorated in the following years, and in 2020–2021 the debt peaked at around 210% of GDP, one of the highest levels ever recorded in a developed economy. Since then, however, the trajectory has reversed: by 2025–2026, debt had fallen to around 137% of GDP, a reduction of around 70–73 percentage points in just a few years and well below the level at the start of the crisis.
This decline was not accidental, but the result of tough measures applied consistently for over a decade. After 2010, Greece was forced to accept bailouts from the European Union and the International Monetary Fund, and instead implemented severe austerity: wages and pensions were cut, taxes were raised, and public spending was cut. These measures were extremely difficult socially, but they led to the elimination of large deficits and, over time, to the emergence of budget surpluses, which means that the state began to collect more than it spends before interest payments.
How Greece restructured its public debt
Debt restructuring also played an essential role. An important part was renegotiated, with very long maturities and low interest rates, and in 2012 private lenders even accepted significant losses. Thus, the annual burden on the budget has become much easier to manage. In addition, in recent years, Greece has begun to repay part of its loans early, which has further reduced long-term costs and increased investor confidence.
Against this background of fiscal discipline, the economy has gradually returned to growth, at rates of around 2% per year, supported in particular by tourism, investment and European funds. Economic growth is crucial because it increases GDP and makes debt, even if it remains high in absolute terms, weigh less as a percentage. In parallel, the banking system was stabilized and the confidence of the financial markets returned, which allowed the state to borrow more cheaply.
Essentially, Greece has achieved this comeback through a combination of austerity, reforms, debt restructuring and economic recovery. It was not a quick fix, but a long and difficult process that saw debt fall from around 210% of GDP to almost 137%, turning one of Europe's worst financial crises into an example of successful fiscal adjustment.
