Officials and Italy’s recently published multi-year budget plan indicate a forthcoming reshuffle of the euro area’s sovereign debt rankings. Greece is projected to see its public debt ratio decline to about 137% of gross domestic product this year, down from 145% in 2025, according to two senior officials. At the same time, Italy’s Treasury plan sees its debt-to-GDP ratio rising from 137.1% in 2025 to 138.6% in 2026.
"Greece will not be the most indebted country in the euro zone - from this year," one of the two Greek officials said. The revised estimate for Greece’s debt ratio will be incorporated into the country's new multi-year fiscal plan, which will be submitted to the European Commission at the end of the month, the official added.
Italy’s multi-year budget plan (Documento di Finanza Pubblica) sets out a path in which public debt remains essentially stable at 138.5% of GDP in 2027, then edges down to 137.9% in 2028 and to 136.3% in 2029. The plan was published on Thursday.
Greece’s debt ratio has fallen markedly since 2020. Over the period, public debt in Greece has been reduced by more than 45 percentage points, reaching 145% of GDP last year. Italy has also lowered its debt burden since 2020, cutting it by around 17 percentage points over the same interval.
Greece’s recent trajectory follows a prolonged financial disruption. The country is still in recovery from a decade-long crisis and three international bailouts that together totalled about 280 billion euros. As part of its fiscal operations this year, Greece plans to repay ahead of schedule loans amounting to some 7 billion euros that were provided under its first bailout.
The numerical shifts in debt-to-GDP ratios, as reported in the Italian budget documents and the updated Greek estimates, drive the conclusion that Greece will be supplanted in the coming year as the euro zone member with the highest public debt ratio. The outcomes rest on the assumptions and timelines presented in each country’s fiscal plans.
- What changed: Greece’s debt estimate falls to about 137% of GDP this year from 145% in 2025; Italy’s debt is projected to rise to 138.6% in 2026 from 137.1% in 2025.
- Projected paths: Italy’s plan shows debt at 138.5% in 2027, 137.9% in 2028 and 136.3% in 2029.
- Context: Since 2020, Greece’s public debt has declined by more than 45 percentage points; Italy’s by about 17 percentage points.