The general government gross debt to GDP ratio in the euro area stands at 88.2%. Photo: Lehtikuva
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Finland recorded the largest increase in public debt-to-GDP ratio among all EU member states in the second quarter of 2025, according to data published by Eurostat. The ratio reached 88.4% by the end of June, up from 84.2% in the previous quarter and 80.6% a year earlier.
The quarterly increase of 4.3 percentage points was the sharpest in the bloc. On an annual basis, the rise totalled 7.8 points, also the highest in the EU. The eurozone average stood at 88.2% while the EU average was 81.9%.
The total value of Finland’s general government debt reached €245.9 billion by the end of June. The country’s debt level is now the highest in its recorded history, both in absolute terms and relative to GDP.
Finland’s economic contraction during the second quarter contributed significantly to the rising debt ratio. According to Eurostat’s seasonally adjusted estimates, the country’s GDP shrank by 0.4% compared to the previous quarter. No other EU country experienced a deeper quarterly decline. Germany, the second-worst performer, contracted by 0.3%.
The EU countries with the highest debt-to-GDP ratios at the end of the second quarter were Greece (151.2%), Italy (138.3%), and France (115.8%). While these ratios remain higher than Finland’s, most of those countries reported smaller quarterly increases or even declines. Greece, for example, recorded an annual drop of 8.9 points.
Among the top risers alongside Finland were Latvia (+2.7 points), Bulgaria (+2.6), Portugal (+1.8), and France (+1.7). Only twelve EU countries saw their debt-to-GDP ratios fall from the previous quarter.
The composition of debt across the EU remained largely unchanged. Debt securities accounted for 84.2% of total debt in the euro area and 83.7% in the EU. Loans made up 13.2% and 13.8% respectively. Currency and deposits remained at 2.5% of total government debt for both zones.
In Finland’s case, the structure was more loan-heavy than average, with loans making up 21.4% of its total public debt. Debt securities made up 66.8%. Currency and deposits contributed 1.5%, in line with most EU member states.
Countries with the lowest debt levels relative to GDP at the end of June included Estonia (23.2%), Luxembourg (25.1%), Bulgaria (26.3%), Denmark (29.7%) and Ireland (33.3%). Many of these countries also saw improvements over the previous quarter.
Ireland posted one of the most significant quarterly drops in debt ratio, falling 1.2 points. Greece and Luxembourg each decreased by 1.1 points. Lithuania posted the sharpest quarterly drop of 1.4 points.
Despite Finland’s rising debt levels, its absolute burden remains lower than that of several larger economies. France’s public debt stood at €3.42 trillion at the end of June. Italy followed at €3.07 trillion, and Germany at €2.73 trillion.
Overall government debt across the euro area reached €13.68 trillion in the second quarter. The EU total was slightly higher at €15.05 trillion. These figures represent increases of 0.5 and 0.4 percentage points respectively from the previous quarter.
HT
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Source: www.helsinkitimes.fi
