By the end of 2026, Greece will no longer be the country with the highest level of public debt in the eurozone. Its debt-to-GDP ratio is expected to fall below Italy’s, according to updated assessments from the European Commission and international financial institutions.
Greece’s public debt is forecast to decline to approximately 140–145% of GDP, while Italy’s is projected to remain at around 145–148% of GDP. This means that, for the first time in many years, Athens will cede to Rome the status of the most heavily indebted economy in the currency bloc.
The key drivers behind Greece’s improving debt trajectory include sustained economic growth — above the eurozone average — strong tourism revenues, and strict fiscal discipline. The country continues to run a primary budget surplus, meaning revenues exceed expenditures before debt servicing costs, which allows it to gradually reduce its overall borrowing.
An additional factor is the structure of Greece’s debt: a substantial portion carries long maturities and fixed interest rates, which cushions the impact of currently elevated European interest rates — an advantage that sets Greece apart from several other eurozone members.
Italy, meanwhile, faces slower economic growth and higher debt servicing costs. Despite efforts to reduce its deficit, the pace of debt reduction remains constrained.
Analysts note that Greece’s improved fundamentals are already being reflected in financial markets: yields on Greek government bonds have fallen noticeably, and the country’s credit ratings have been upgraded to investment grade. This has bolstered investor confidence and broadened its financing options.
Nevertheless, experts caution that the durability of this trend depends on external conditions — in particular, European Central Bank policy, inflation dynamics, and EU economic growth. Any slowdown could put the brakes on further debt reduction.
Should the trend hold, Greece will firmly cement its emergence from the debt crisis that began more than a decade ago and led to sweeping bailout programmes and severe austerity measures.