Phoenix 24
New fiscal data expose growing pressure on Europe’s public finances.
BRUSSELS
Government debt across the eurozone reached 88.8% of gross domestic product in the second quarter of 2026, according to new figures published by Eurostat. The increase highlights mounting fiscal pressures across Europe, with Italy approaching Greece’s debt ratio and France facing sharply higher borrowing costs amid political and budgetary uncertainty.
The latest figures show that public debt among the euro area’s 21 member countries increased from 88.4% of GDP in the previous quarter and 87.3% a year earlier. In nominal terms, governments collectively owed approximately €14.4 trillion.
Across the wider European Union, public debt reached 82.9% of GDP, compared with 81.4% in the second quarter of 2025.
The debt-to-GDP ratio measures government liabilities relative to economic output. An increase can reflect additional borrowing, weaker economic growth or a combination of factors, making it an important indicator of fiscal conditions rather than a complete measure of financial sustainability.
Greece remains the European Union’s most indebted country, with public debt equivalent to 140.8% of GDP. Italy follows closely at 139.9%, narrowing the difference between the two countries to less than one percentage point.
Their trajectories, however, differ considerably. Greece reduced its debt ratio by 11.2 percentage points over the previous year, supported by budget surpluses, while Italy’s ratio increased by 1.3 percentage points during the second quarter alone.
The comparison illustrates why similar debt levels do not necessarily imply identical fiscal risks. Economic growth, financing conditions and the direction of public borrowing all influence a country’s capacity to manage its obligations.
France presents another concern. Its debt reached 119.1% of GDP, an increase of 3.7 percentage points over twelve months, while the yield on its benchmark 10-year government bonds exceeded 5% for the first time since 2002.
Higher bond yields can increase the cost of refinancing government liabilities, although the effect on total interest expenditure develops gradually as existing debt matures.
France’s situation has attracted particular attention because of continuing budget negotiations and political uncertainty surrounding efforts to reduce its fiscal deficit.
Elsewhere, Belgium recorded debt of 110.2% of GDP, while Spain stood at 101.4%. Germany’s ratio reached 62.8%, reflecting additional borrowing and changing expenditure priorities.
Under the European Union’s fiscal framework, the reference values are 60% of GDP for public debt and 3% for annual budget deficits. Exceeding these levels does not automatically establish an immediate debt crisis, but it can trigger additional scrutiny and fiscal adjustment requirements.
The eurozone’s seasonally adjusted government deficit also increased to 3.3% of GDP in the second quarter, compared with 3.2% in the preceding period.
These developments arrive as European governments confront overlapping demands for defense investment, infrastructure modernization, energy security and social spending.
Maintaining fiscal sustainability therefore involves difficult choices between controlling expenditure, raising revenue and supporting economic growth.
The International Monetary Fund has recently warned that European countries need stronger productivity and credible medium-term fiscal strategies to prevent debt burdens from becoming increasingly difficult to manage.
The latest Eurostat figures do not establish that a new sovereign debt crisis is imminent. They do demonstrate, however, that the region’s fiscal vulnerabilities remain unevenly distributed and sensitive to changes in borrowing costs.
For European policymakers, the central challenge is no longer simply reducing debt ratios. It is preserving sufficient financial capacity to respond to future economic shocks while meeting increasingly expensive strategic commitments.
Beyond the Numbers, the Consequences.