Greece has achieved the largest and fastest reduction in its debt-to-GDP ratio among eurozone countries, marking a significant shift in its fiscal trajectory after years of elevated public debt levels.
According to analysis by Alpha Bank, Greece’s debt-to-GDP ratio has fallen from 209.4% in 2020 to 146.1% in 2025, a decline of more than 63 percentage points within five years. This represents the steepest reduction recorded in the euro area over that period.
Sustained downward trend in debt levels
The improvement is not limited to the ratio alone. The report notes that Greece, alongside Ireland and Cyprus, is among the only eurozone countries to have reduced its nominal debt in the 2024–2025 period, while several major economies such as France, Italy and Spain saw increases.
The decline has been supported by a combination of economic growth, fiscal discipline and debt management measures, including early repayments of existing obligations.
A key contribution came from the early repayment of €5.3 billion in loans linked to Greece’s first financial assistance program launched in 2010.
Strong surpluses and economic growth
A significant factor behind the improvement has been Greece’s continued primary budget surpluses. In 2025, the country recorded a primary surplus of 4.9% of GDP, equivalent to €12.1 billion, for the third consecutive year.
This performance stands in contrast to the majority of eurozone members, which reported primary deficits. The surplus was driven by rising revenues linked to economic growth, higher employment, wage increases and investment activity, as well as structural improvements such as reduced tax evasion and increased digital payments.
Real GDP growth of 2.1%, combined with inflationary pressures, led to a 4.9% increase in nominal GDP in 2025, further supporting the reduction in the debt ratio.
Outlook for further decline
Official projections cited in the report suggest that Greece’s debt-to-GDP ratio will continue to decline, reaching 136.8% in 2026 and 130.3% in 2027. Primary surpluses are expected to remain at 3.2% of GDP over the same period.
If current trends persist, Greece could see its debt ratio fall below that of Italy within the next two years. Such an outcome would mark a notable milestone, ending a two-decade period during which Greece held the highest debt ratio in the eurozone.
Policy space and economic resilience
The sustained improvement in public finances is seen as strengthening investor confidence and expanding fiscal space for targeted policy measures within European fiscal rules.
Authorities have already announced additional support packages totaling €500 million for households and businesses, following earlier measures of €300 million, aimed at offsetting higher energy costs linked to geopolitical tensions in the Middle East.
At the European level, initiatives such as “AccelerateEU” are also being developed to address energy costs and support the transition toward cleaner domestic energy sources through combined public and private investment.
Overall, the data points to a marked shift in Greece’s fiscal position, driven by stronger growth, improved revenue performance and active debt management.
