Italy Poised to Overtake Greece as Europe's Most Indebted Nation

Italian Prime Minister Giorgia Meloni faces increasing pressure as Italy is projected to surpass Greece as the European Union's most indebted country in 2026. According to International Monetary Fund forecasts, Greece’s debt-to-GDP ratio is expected to drop to 136.9 percent, while Italy’s will rise to 138.4 percent. This shift marks a significant turnaround for Greece, which has successfully reduced its liabilities from nearly 210 percent in 2020 through strict fiscal control and favorable rescue package terms. Conversely, Italy struggles with stagnant growth, estimated at just 0.5 percent, despite receiving substantial funds from the EU’s Next Generation EU program. Italian Finance Minister Giancarlo Giorgetti acknowledged the country's precarious debt position, warning against increased spending ahead of the 2027 elections. While Greece benefits from robust tourism and a two percent growth outlook, Italy faces uncertainties stemming from global conflicts, energy prices, and weak productivity improvements. The diverging economic trajectories highlight Greece's recovery success against Italy's ongoing structural challenges, raising concerns about long-term financial stability in Southern Europe.