In 2026, Italy will surpass Greece for the first time in two decades in terms of government debt, becoming the most indebted country among Eurozone members. This change will occur due to the gradual reduction of Greece’s debt burden and the simultaneous increase in Italy’s debt.
This is reported by Finway
Dynamics of Government Debts in Italy and Greece
According to Italy’s new budget plan, by the end of this year, Greece will cease to be the Eurozone country with the highest debt-to-GDP ratio. It is expected that Greece’s debt will decrease to approximately 137% of its gross domestic product, compared to 145% in 2025. This positive trend has been made possible by Greece’s efforts towards financial stabilization following years of debt crisis.
“Since 2020, Greece’s government debt, which has been the highest in the Eurozone for the past two decades, has decreased by more than 45 percentage points – to 145% of GDP last year. Italy has reduced its debt by approximately 17 percentage points during the same period.”
At the same time, Italy’s multi-year budget plan (DFP), released by the country’s Ministry of Finance, forecasts an increase in Italy’s government debt: from 137.1% of GDP in 2025 to 138% in 2026. In 2027, this figure is expected to remain almost unchanged at 138.5%, while a gradual reduction to 136.3% is anticipated during 2028–2029.
Prospects and Budget Discipline
Updated estimates regarding Greece’s debt will be included in the multi-year fiscal plan that the country plans to submit to the European Commission at the end of April. Meanwhile, in Italy, according to revised statistics for 2025, the national budget deficit remained at 3.1% of GDP. This indicates that the country will continue to be under EU disciplinary procedures due to exceeding the allowable budget deficit.
Thus, the change in leadership regarding government debt levels among Eurozone members reflects gradual structural changes in the economies of both countries and efforts towards financial stability. In the coming years, the situation in Europe’s debt markets will remain a focal point for investors and international organizations.