Greece is on track to be overtaken by Italy as the country with the highest debt in the Eurozone in 2026, according to a report by Reuters.
Greek debt is estimated to be reduced to about 137% of gross domestic product this year from 145% in 2025, two senior officials told Reuters. By contrast, Italy sees its debt rising from 137.1% of GDP in 2025 to 138.6% in 2026, under the Treasury’s multi-year budget plan (DFP) published on Thursday.
Greece’s progress is part of a broader strategy to accelerate the repayment of bailout loans—including a planned €7 billion early repayment later this year—reflecting a decade of fiscal recovery following the country’s sovereign debt crisis.
Greece’s debt journey
Following the 2008 global financial crisis, Greece entered a severe sovereign debt crisis. It became the first developed nation to require massive international bailouts to avoid default. Between 2010 and 2015, Greece received three financial assistance packages totaling roughly €280 billion from the EU, the ECB, and the IMF.
In exchange, the country implemented years of painful austerity measures, including deep cuts to pensions, salaries, and public services, which triggered a prolonged recession and high unemployment.
The COVID-19 pandemic caused a temporary, sharp increase in debt as the government borrowed to support the economy during lockdowns. However, since 2020, Greece has achieved one of the steepest declines in debt-to-GDP ratios in Europe. This was driven by a strong economic growth, with the country consistently outperforming the Eurozone average in GDP growth.
The government successfully shifted from deficits to consistent budget surpluses (collecting more than it spends, excluding interest payments). These improvements led to multiple credit rating upgrades, restoring Greece to investment-grade status, which has made borrowing cheaper and stabilized the economy.
Current debt outlook for Greece
The shift in status relative to Italy is largely a result of Greece’s disciplined debt management strategy. While Italy faces structural fiscal challenges and a rising debt ratio, Greece has utilized a mix of economic growth and early loan repayments to bring its debt load down by over 45 percentage points since 2020.
While the debt-to-GDP ratio remains high by international standards, the structure of that debt—much of it now held by stable European institutions with favorable, long-term interest rates—makes it far more manageable than the volatile, market-exposed debt of the crisis era.
Related: Greece’s Private Debt Reaches €407.6 Billion as Cost of Living Pressures Persist
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