Greek Debt Falls, but Interest Costs Keep Risks High

Greece has cut its debt as a share of economic output faster than almost any country in Europe, yet that progress alone will not secure its public finances, the Hellenic Fiscal Council said in its spring report.

The council, Greece’s independent fiscal watchdog, said the country still carries the heaviest debt load in the European Union, and that servicing it continues to drain a large part of the state budget. As Greece leans more heavily on international markets for financing, borrowing costs are set to climb, making sustained primary surpluses and solid growth all the more important.

Interest costs rival defense spending

The steep decline in Greece’s debt-to-GDP ratio since 2021 tells only part of the story, the council said. Even with the ratio falling, Greece still pays far more in interest than most of its eurozone peers.