Italy Set to Overtake Greece as Eurozone's Most Indebted Nation by 2026

Greece's Remarkable Turnaround

In contrast, Greece—once the Eurozone's most troubled economy—has significantly improved its fiscal position. The Greek Public Debt Management Agency forecasts a decline in debt from 146.1% of GDP in 2025 to 136.8% in 2026. Economist Giampaolo Galli noted that Greece has undergone a "sehr schnellen Anpassungsprozess" ("very rapid adjustment process") since 2020, when its debt stood at 210% of GDP.

Between 2020 and 2025, Greece's primary balance improved by 12 percentage points, shifting from a deficit exceeding 7% of GDP to a surplus of 5%. The country also achieved an average annual growth rate of 7.7% from 2021 to 2025, bolstered by post-pandemic recovery efforts and structural reforms.

Comparative Outlook

By 2026, Italy's debt-to-GDP ratio is expected to reach 138.4%, slightly above Greece's projected 136.9%. This reversal marks a significant shift from the previous decade, when Greece's debt crisis dominated Eurozone economic discussions.

While Greece has managed to stabilize its finances through austerity measures and international bailouts, Italy's rising debt highlights ongoing fiscal pressures within the Eurozone's third-largest economy. The divergence underscores the varying trajectories of member states as they navigate post-pandemic economic challenges.