Italy is on track to overtake Greece as the eurozone's most indebted country by the end of this year, as Greece's public debt is forecast to dip below Italy's, according to two sources and Italy's budget plan data.
Debt Ratio Forecasts
Greece's debt-to-GDP ratio is estimated to fall to approximately 137 per cent this year, a reduction from 145.9 per cent in 2025, two senior officials told Reuters. In contrast, Italy's debt is projected to peak at 138.6 per cent in 2026, an increase of 1.5 percentage points from 137.1 per cent of GDP in 2025, as outlined in the Treasury's multi-year budget plan released this week.
Both officials, speaking anonymously, confirmed that Greece would from this year cease to be the eurozone's most indebted country. They said the new estimate for Greece's debt ratio would be included in the country's multi-year fiscal plan to be submitted to the European Commission at the end of this month.
Italy's Debt Trajectory
Italy's debt will be roughly stable at 138.5 per cent in 2027, before declining to 137.9 per cent in 2028 and to 136.3 per cent the following year, its budget plan showed. Prime Minister Giorgia Meloni often says that Italy's debt would have started to fall sooner and faster but for the negative impact of state-funded building incentives introduced under her predecessors, Giuseppe Conte and Mario Draghi.
Greece's Debt Reduction
Greece's public debt, which has been the highest in the eurozone over the last two decades, has shrunk by more than 60 percentage points to 145.9 per cent of GDP last year from a peak of 209.4 per cent in 2020. Italy cut its debt by some 17 percentage points over the same period. Greece, recovering from a decade-long financial crisis and three bailouts totalling about 280 billion euros ($327.10 billion), plans to repay ahead of schedule loans worth some 7 billion euros from its first bailout later in the year.
Economic Performance
After rebounding strongly from the COVID-19 pandemic, Italy has returned to its customary place among the eurozone's most sluggish performers. The country posted three consecutive years of sub-1 per cent growth from 2023 to 2025 despite a constant flow of billions of euros from the EU's pandemic recovery funds, a trend that the Treasury's budget plan said would persist through 2029. Greece's economy grew steadily by more than 2 per cent over the last three years, outstripping the EU average, driven by investments, domestic demand and tourism.
