Government debt in the EU has risen again, Czech Republic remains below average

Government debt in the euro area and the European Union as a whole rose again slightly in the second quarter of 2025. According to the latest data Eurostat the euro area (EA20) gross government debt-to-GDP ratio reached 88.2 %, compared with 87.7 % at the end of the first quarter. In the European Union (EU27) as a whole, debt increased from 81.5 % to 81.9 % of GDP, an increase of 0.5 percentage points in the euro area and 0.7 points in the EU as a whole compared to the same period last year.

Government debt in the EU is largely made up of bonds - 84.2 % of total liabilities in the euro area and 83.7 % in the EU as a whole. Borrowing accounts for around 13 % and currency and deposits for around 2.5 %. Intergovernmental loans between Member States represent 1.4 % of GDP in the euro area and 1.2 % in the EU.

Greece remains the most indebted country, with a government debt of 151.2 % of GDP, followed by Italy (138.3 %), France (115.8 %), Belgium (106.2 %) and Spain (103.4 %). At the other end of the ranking is Estonia with a debt of only 23.2 % of GDP, followed by Luxembourg (25.1 %), Bulgaria (26.3 %) and Denmark (29.7 %).

On a quarter-on-quarter basis, debt-to-GDP rose in 15 Member States, while it fell in 12. The largest increases were recorded in Finland (+4.3 pp), Latvia (+2.7), Bulgaria (+2.6), Portugal (+1.8), France (+1.7) and Romania (+1.4). By contrast, the largest declines in debt were recorded in Lithuania (-1.4), Ireland (-1.2), Greece and Luxembourg (both -1.1).

According to Eurostat, the Czech Republic holds a stable position in the middle of the European field. Government gross debt to GDP increased from 43.3 % to 43.8 % at the end of the second quarter of 2025. Compared to last year, this is an increase of 1.4 percentage points, up half a point quarter-on-quarter. The Czech debt is thus below the EU and euro area average and remains roughly at the level of the Netherlands (42.7 %) or Malta (46.9 %).

In terms of its structure, Czech public debt is mostly bonds (39.5 % of GDP), with a smaller share of loans (3.6 %) and only a fraction of currency and deposits. The share of intergovernmental borrowing amounts to 0.7 % of GDP.

Compared to other Central and Eastern European countries, the Czech Republic still has a relatively favourable debt ratio. Poland has 58.1 % of GDP, Slovakia 62.9 % and Hungary 76.2 %. In contrast, Bulgaria has the lowest debt ratio in the region (26.3 %).

The data published by Eurostat are still classified as preliminary. They are based on the ESA 2010 methodology, which is also used to assess compliance with the Maastricht criteria under the excessive deficit procedure.

Eurostat/gnews.cz - GH