Italy Set to Overtake Greece as Euro Zone’s Most Indebted Country in 2026

Greece’s advancement is portion of a broader strategy to accelerate the repayment of bailout loans. Credit: Greek Reporter

Greece is connected way to beryllium overtaken by Italy arsenic the euro zone’s astir indebted state successful 2026, according to a study by Reuters.

Greek debt is estimated to beryllium reduced to astir 137% of gross home ​product this twelvemonth from 145% successful 2025, 2 elder officials ​told Reuters. By contrast, Italy sees its indebtedness rising from 137.1% ⁠of GDP successful 2025 to 138.6% successful 2026, nether the Treasury’s ​multi-year fund program (DFP) published connected Thursday.

Greece’s advancement is portion of a broader strategy to accelerate the repayment of bailout loans—including a planned €7 cardinal aboriginal repayment aboriginal this year—reflecting a decennary of fiscal betterment pursuing the country’s sovereign indebtedness crisis.

Greece’s indebtedness journey

Following the 2008 planetary fiscal crisis, Greece entered a terrible sovereign indebtedness crisis. It became the archetypal developed federation to necessitate monolithic international bailouts to debar default. Between 2010 and 2015, Greece received 3 fiscal assistance packages totaling astir €280 cardinal from the EU, the ECB, and the IMF.

In exchange, the state implemented years of achy austerity measures, including heavy cuts to pensions, salaries, and nationalist services, which triggered a prolonged recession and precocious unemployment.

The COVID-19 pandemic caused a temporary, crisp summation successful indebtedness arsenic the authorities borrowed to enactment the system during lockdowns. However, since 2020, Greece has achieved 1 of the steepest declines successful debt-to-GDP ratios successful Europe.

This was driven by a beardown economical growth, with the state consistently outperforming the Eurozone mean successful GDP growth.

The authorities successfully shifted from deficits to accordant fund surpluses (collecting much than it spends, excluding involvement payments).

These improvements led to aggregate recognition standing upgrades, restoring Greece to investment-grade status, which has made borrowing cheaper and stabilized the economy.

The existent outlook

The displacement successful presumption comparative to Italy is mostly a effect of Greece’s disciplined indebtedness absorption strategy. While Italy faces structural fiscal challenges and a rising indebtedness ratio, Greece has utilized a premix of economical maturation and aboriginal indebtedness repayments to bring its indebtedness load down by implicit 45 percent points since 2020.

While the debt-to-GDP ratio remains precocious by planetary standards, the operation of that debt—much of it present held by unchangeable European institutions with favorable, semipermanent involvement rates—makes it acold much manageable than the volatile, market-exposed indebtedness of the situation era.

Related: Greece’s Private Debt Reaches €407.6 Billion arsenic Cost of Living Pressures Persist