Overview
Two senior officials, speaking on condition of anonymity, and figures contained in Italy’s recently published multi-year budget plan point to a shift in the euro zone’s sovereign debt ranking. Greek public debt is estimated to decline to around 137% of gross domestic product (GDP) this year, down from 145.9% in 2025, the officials said. By contrast, Italy’s Treasury projects its debt ratio will peak at 138.6% of GDP in 2026, up 1.5 percentage points from 137.1% in 2025 under its budget plan published this week.
The officials indicated that, with the new Greek estimate, Greece will cease to be the euro zone’s most indebted country from this year onward. They said Greece will include the revised debt ratio in its multi-year fiscal plan scheduled for submission to the European Commission at the end of this month.
Italy’s path
Italy’s budget documents outline a trajectory in which public debt remains elevated through the rest of the decade. The plan shows Italy’s debt at roughly 138.5% of GDP in 2027, followed by a gradual decline to 137.9% in 2028 and 136.3% in 2029. Those projections keep Italy at or near the top of euro zone debt ratios for several years.
Italian leaders have framed the recent course of public borrowing in political terms. Prime Minister Giorgia Meloni has said Italy’s debt would have started to fall sooner and more quickly if not for the negative effects of state-funded building incentives introduced under previous governments led by Giuseppe Conte and Mario Draghi.
Greek developments
Greece’s public debt, which has been the highest in the euro zone for roughly two decades, has fallen sharply from its pandemic-era peak. The debt ratio declined by more than 60 percentage points to 145.9% of GDP last year from a high of 209.4% in 2020. Over the same period, Italy reduced its debt by roughly 17 percentage points.
As part of its fiscal moves this year, Greece plans to make an early repayment of roughly 7 billion euros in loans from its first bailout later in the year. Authorities expect the updated debt figures to be reflected in the country’s forthcoming fiscal plan to the European Commission.
Growth and policy context
The two economies have followed contrasting recent growth paths. After rebounding strongly from the COVID-19 pandemic, Italy has slipped back into relatively weak performance, recording three consecutive years of sub-1% growth from 2023 to 2025 despite continued inflows from EU pandemic recovery funds. The Treasury’s budget plan indicates this subdued growth trend is expected to persist through 2029.
Greece, by contrast, has recorded steady growth of more than 2% annually over the last three years, outpacing the EU average. Greek growth over this period has been driven by investments, domestic demand and tourism.
Note on currency conversion: the article references an exchange rate of $1 = 0.8560 euros as provided in the source material.