Makrane the largest reduction in public debt among the 27 member states of the European Union has Greece since the outbreak of the pandemic, according to the latest aggregate data published yesterday by Eurostat, continuing the trend of recent years.
Under the burden of exceptional spending and the contraction of economic activity caused by the spread of Covid-19, Greece’s debt reached 212.9% of GDP in the first quarter of 2021, more than double the EU average, then measured at 91.5%.
By the end of 2025, however, the ratio of government debt to GDP had been reduced to 146.1%,which represents a reduction of almost 67 points in just four years, although at that time the economy was being tested by the double energy and supply crisis caused by Russia’s invasion of Ukraine.
In practice, this means that GDP to debt ratio in Greece has fallen to its best level since the summer of 2010, i.e. since the first memorandum.
This has been achieved thanks to consistent fiscal policy that produces surplus budgets, the early repayment of loans under the first memorandum and the payment of expensive IMF loans, and high growth rates that are boosting GDP.
In the same four-year period the European average improved by only 9.8 points, with the result that the gap between our country and the EU was “trimmed” to 64.4 points, compared to 121.4 points at the beginning of 2021.
The only EU country that has achieved something comparable to Greece is Cyprus, which between 2021 and 2025 managed to improve its GDP to government debt ratio by 62.5 points.
In contrast, eight member states saw their debt increase over the same period, while strong economies such as Germany and France, which traditionally have more favourable borrowing rates,reduced their GDP-to-debt ratio by just 5.3 and 1.5 points respectively.
Note that the structure of Greek debt is favorable to the country, as much of it consists of support loans granted during the period of the support programs, as reflected in the ELSTAT analysis.
The government’s goal is to reduce debt to 140% of GDP in 2027 and 120% in 2030.
