Government debt across the 21-nation eurozone climbed to 88.8% of combined economic output in the second quarter of 2026, according to Eurostat data released on Wednesday. That marks an increase from 87.3% in the same period last year, as several large member states continue to run budget deficits that push their debt burdens higher.
The debt-to-GDP ratio, which measures what governments owe relative to the size of their economies, remains well above the EU's 60% guideline. The bloc's fiscal rules also cap annual budget deficits at 3% of GDP, but many countries are struggling to meet that target.
Italy's debt ratio now stands at 139.9%, less than one percentage point below Greece's 140.8%, the highest in the EU. Greece has been reducing its debt steadily, cutting its ratio by 11.2 percentage points over the past year thanks to budget surpluses. Italy, by contrast, saw its ratio rise by 1.3 points in the second quarter alone. In 2022, Greece's debt was 177.8% of GDP, compared with Italy's 138.4%.
France has the third-highest debt ratio in the bloc at 119.1%, up 3.7 percentage points from a year earlier—one of the steepest increases among eurozone members. The rise comes as investors demand higher yields on French government bonds; the 10-year yield topped 5% for the first time since 2002 on Wednesday. France's budget deficit reached 5.1% of GDP last year, the fourth-largest in the EU after Romania, Poland, and Belgium.
Prime Minister Sébastien Lecornu is facing a divided parliament as he tries to pass the 2027 budget, which aims to reduce the deficit to 5% of GDP. Without a clear majority, his proposed spending cuts face an uncertain path. The political friction in Paris has added to market jitters, with some analysts warning that France's fiscal strain could spill over into the wider eurozone economy.
Wider EU picture
Across the entire European Union, government debt rose to 82.9% of GDP in the second quarter, up from 81.4% a year earlier. In cash terms, eurozone governments owed roughly €14.4 trillion. Full-year figures for 2025 show EU debt at 81.5% of GDP, compared with 80.3% in 2024, while the bloc's aggregate deficit held at 3.1%—just above the 3% threshold.
Germany, the eurozone's largest economy, saw its debt ratio rise to 62.8% from 61.4% as its deficit widened to 2.9%. Belgium and Spain also remain above 100% of GDP, at 110.2% and 101.4%, respectively. Estonia has the lowest ratio at 26.1%, followed by Denmark and Luxembourg. Poland recorded the sharpest increase in its debt ratio, up 6.7 percentage points from a year earlier.
Last year, 12 member states had debt above the EU's 60% ceiling, and 11 ran deficits of 3% or more. The figures underscore the persistent fiscal challenges facing the continent, even as the post-pandemic recovery has faded.
Eurostat also expressed a reservation about the quality of Bulgaria's 2025 data, specifically regarding how it records spending by its road infrastructure agency. Bulgaria joined the eurozone on 1 January 2026, becoming the 21st member, but its fiscal statistics will be scrutinised closely in the coming years.
The rising debt levels come at a time of political and social tension in several countries. Italy has deployed troops to Milan following violent protests over the cost of living, while France is preparing to deploy troops ahead of weekend demonstrations. These pressures add to the difficulty of implementing the austerity measures needed to bring deficits under control.
With debt levels still well above pre-pandemic norms, the eurozone faces a delicate balancing act: supporting growth and social stability while convincing markets that fiscal discipline remains a priority. The coming months will test whether governments can navigate these competing demands without triggering a broader debt crisis.
