Italy Projected to Surpass Greece as the Eurozone's Most Indebted Nation
Rome, Friday, 24 April 2026.
By the end of 2026, Italy’s rising public debt will surpass Greece’s falling obligations. This historic shift highlights Greece’s financial recovery while raising concerns over Italy’s fiscal stability.
A Historic Shift in European Debt Dynamics
Under Italy’s newly approved multi-year budget plan, known as the Public Finance Document (DFP), the nation’s public debt is projected to rise from 137.1 percent of its gross domestic product (GDP) in 2025 to 138.6 percent by the end of 2026 [1][4]. Conversely, Greek officials estimate that their national debt will decrease to approximately 137 percent of GDP this year, down from 145 percent in 2025—a reduction of 8 percentage points [1]. This intersecting trajectory means that by the close of 2026, Greece will no longer hold the title of the eurozone’s most indebted country, a position it has occupied for two decades [1].
Greece’s Steady Fiscal Rehabilitation
Greece’s economic recovery follows a severe, decade-long financial crisis that necessitated three international bailouts totaling roughly 280 billion euros [1]. Since 2020, the country has achieved substantial fiscal consolidation, shrinking its public debt by over 45 percentage points [1]. Eurostat data underscores this rapid improvement, showing that between the fourth quarter of 2024 and the fourth quarter of 2025, Greece recorded the largest year-on-year debt ratio decrease in the European Union, dropping by 8.0 percentage points [2].
Italy’s Expanding Fiscal Pressures
In stark contrast to Greece’s consolidation, Italy is grappling with expanding fiscal pressures. Between 1988 and 2025, Italy’s debt-to-GDP ratio climbed by 41.37 percentage points, following an uneven but persistently upward trajectory [3]. Recent data exacerbates this trend; during the fourth quarter of 2025, Italy saw its debt ratio increase by 2.4 percentage points year-on-year [2].
Broader Implications for the Eurozone
This changing of the guard at the top of the eurozone’s debt tables occurs against a backdrop of broader European economic recalibration. At the end of 2025, the general government gross debt for the 20-nation euro area stood at 87.8 percent of GDP, primarily composed of debt securities [2]. For policymakers, Italy’s debt trajectory—expected to remain virtually stable at 138.5 percent in 2027 before declining to 136.3 percent in 2029—presents a systemic challenge [1][4].