Eurozone Debt Reaches Alarming New Highs
Brussels, Monday, 13 October 2025.
Eurozone’s debt has risen to 88% of GDP, sparking concerns over fiscal stability amidst weak growth and rising interest rates. The situation poses risks to both European and global economies.
Rising Debt and Economic Growth Concerns
The eurozone’s public debt has reached 88.0% of GDP at the end of Q1 2025, marking a significant increase from 87.4% in the previous quarter. This rise reverses the modest downward trend observed in prior quarters [1]. The European Commission’s Spring 2025 forecast predicts a sluggish growth of 1.1% for the EU and 0.9% for the eurozone, reflecting a fragile recovery that is vulnerable to external shocks [1].
Political Instability and Fiscal Challenges
Political instability in countries such as France exacerbates the eurozone’s fiscal challenges. France’s national debt stands at approximately €3.35 trillion or nearly 113% of GDP, with projections suggesting it could reach 125% by 2030 [2]. The recent resignation of French Prime Minister Sebastien Lecornu has further shaken markets and weakened the euro, raising fears of wider eurozone instability [2].
Diverging Debt Levels Across Member States
The debt-to-GDP ratios vary significantly across eurozone countries. Italy, for instance, has a debt burden of approximately 137.9% of GDP, while France’s is about 113%, both considerably higher than fiscally safer states like the Netherlands or Estonia [1]. This disparity underscores the challenges of maintaining fiscal cohesion within the eurozone, particularly as countries face different economic pressures and political climates [1].
The Role of the European Central Bank
The European Central Bank (ECB) plays a crucial role in managing the eurozone’s fiscal landscape. Its asset purchase programs and lending practices have inadvertently led to fiscal transfers among eurozone countries, raising concerns about the sustainability of such practices [3]. The ECB’s interventions have been critical in stabilizing the financial system, yet they also highlight the need for structural reforms to address underlying fiscal imbalances [3].