Greece poised to lose euro zone debt crown to Italy in 2026

Greece is on course to surrender a distinction it has carried since the euro crisis: the euro zone’s most indebted economy. Greek public debt is expected to fall to about 137% of GDP in 2026, down from 145% in 2025, while Italy’s ratio is forecast to rise from 137.1% to 138.6%, enough to push Rome ahead of Athens by the end of this year.

One senior Greek official summed up the shift bluntly: "Greece will not be the most indebted country in the euro zone - from this year." The new figure will be folded into Greece’s multi-year fiscal plan, which is due to be sent to the European Commission later this month.

The change matters because it marks a real break from the years when Greece’s debt crisis dominated European politics. Greece has cut its debt burden by more than 45 percentage points since 2020, a steep decline helped by stronger nominal growth and primary budget surpluses. Italy has also improved, but by a far smaller margin, trimming debt by around 17 percentage points over the same period. That gap is now reshaping the euro zone’s debt hierarchy.

The headline, however, does not mean Greece has escaped pressure. Eurostat said Greek general government debt was still 152.5% of GDP at the end of the first quarter of 2025, compared with 137.9% for Italy. The crossover is therefore a forecast, not a current snapshot, and debt ratios alone can obscure how the numbers move. A stronger economy can shrink the ratio even when the absolute debt stock remains large, while weak growth can keep a country trapped near the top even after years of budget restraint.

Athens has also begun repaying its crisis-era obligations faster than originally planned. Greece intends to repay about 7 billion euros in bailout loans ahead of schedule later this year. The country’s three rescue programs from 2010 to 2015 totaled about 280 billion euros, including 53 billion euros in bilateral eurozone loans and 30 billion euros from the International Monetary Fund. Greece paid off the IMF in 2022 and had already repaid 22 billion euros of the bilateral loans by the end of 2024. The remaining amounts are now aimed for full repayment by 2031, instead of 2041.

Italy’s path looks far less dramatic. The European Commission says Greece’s debt should keep falling below 140% of GDP by 2027, while Italy’s debt ratio is set to reach 137.2% by 2027 because primary surpluses are still not enough to offset interest costs and other adjustments. Italy’s new budget plan projects debt at 138.5% in 2027, 137.9% in 2028 and 136.3% in 2029, showing how slowly Rome’s burden is expected to ease. The euro zone’s old crisis map is shifting, but the structural strain in Italy is still there.