Greece''s Public Debt Projected to Fall Below Italy''s, Ending Its Status as Eurozone''s Most Indebted Nation
Introduction
By the end of this year, Greece is expected to no longer hold the position of the eurozone''s most indebted country, as its public debt-to-GDP ratio is forecast to decline below that of Italy, according to official data and statements from senior officials.
Main Body
Two senior Greek officials, speaking on condition of anonymity, stated that the nation''s debt-to-GDP ratio is estimated to decrease to approximately 137% in 2026, down from 145.9% in 2025. This reduction would place Greece''s debt below Italy''s, which is projected to peak at 138.6% of GDP in 2026, an increase from 137.1% in 2025, as detailed in Italy''s multi-year budget plan released this week. The Italian Treasury''s plan further indicates that debt will remain roughly stable at 138.5% in 2027, then decline to 137.9% in 2028 and 136.3% in 2029. Greece''s public debt has contracted significantly over the past several years, shrinking by more than 60 percentage points from a peak of 209.4% of GDP in 2020 to 145.9% in 2025. This improvement follows a decade-long financial crisis and three international bailouts totaling approximately €280 billion. Greece intends to repay early loans worth about €7 billion from its first bailout later this year. In contrast, Italy reduced its debt by roughly 17 percentage points over the same period. Italian Prime Minister Giorgia Meloni has attributed the slower reduction in Italy''s debt to the fiscal impact of state-funded building incentives introduced under her predecessors, Giuseppe Conte and Mario Draghi. Italy''s economic performance has also been subdued: after a strong post-pandemic rebound, the country recorded three consecutive years of sub-1% growth from 2023 to 2025, despite receiving substantial EU pandemic recovery funds. The Treasury''s budget plan projects this sluggish trend to continue through 2029. Greece, meanwhile, has experienced steady economic growth exceeding 2% annually over the past three years, outperforming the EU average, driven by investments, domestic demand, and tourism. The revised debt estimate for Greece will be included in its multi-year fiscal plan, which is to be submitted to the European Commission at the end of this month.
Conclusion
Greece is on track to relinquish its long-held status as the eurozone''s most indebted country by the close of 2026, as its debt-to-GDP ratio falls below Italy''s, reflecting divergent fiscal trajectories and economic performances between the two nations.