Government debt, measured as a percentage of gross domestic product (GDP), increased across the euro area and the wider European Union (EU) at the end of the second quarter of 2025, according to a report released by Eurostat on Tuesday.

However, Cyprus recorded one of the most significant decreases over the year, the statistical office reported.

The general government gross debt to GDP ratio for the 20-nation euro area (EA20) reached 88.2 per cent at the end of the second quarter of 2025, a rise from 87.7 per cent recorded at the end of the first quarter of 2025.

The ratio for the entire EU also saw an increase, moving from 81.5 per cent to 81.9 per cent over the same period.

Compared with the second quarter of 2024, the government debt to GDP ratio also increased in both the euro area, from 87.7 per cent to 88.2 per cent, and the EU, from 81.2 per cent to 81.9 per cent.

Looking at individual member states, the end of the second quarter of 2025 saw the highest government debt to GDP ratios in Greece (151.2 per cent), Italy (138.3 per cent), France (115.8 per cent), Belgium (106.2 per cent), and Spain (103.4 per cent).

Conversely, the lowest ratios were reported in Estonia (23.2 per cent), Luxembourg (25.1 per cent), Bulgaria (26.3 per cent), and Denmark (29.7 per cent).

Compared with the first quarter of 2025, fifteen member states experienced an increase in their debt to GDP ratio at the end of the second quarter of 2025, while twelve registered a decrease.

The largest increases were observed in Finland (+4.3 percentage points – pp), Latvia (+2.7 pp), Bulgaria (+2.6 pp), Portugal (+1.8 pp), France (+1.7 pp), and Romania (+1.4 pp).

The largest decreases were recorded in Lithuania (-1.4 pp), Ireland (-1.2 pp), and both Greece and Luxembourg (both -1.1 pp).

Over the year, from the second quarter of 2024 to the second quarter of 2025, sixteen member states registered an increase in their debt to GDP ratio, and eleven registered a decrease.

Cyprus stood out by recording the third-largest decrease in its debt-to-GDP ratio over this annual period.

The largest decreases were observed in Greece (-8.9 pp), Ireland (-7.2 pp), Cyprus (-6.5 pp), Denmark (-3.5 pp) and Portugal (-2.3 pp), Eurostat reported.

The largest increases in the ratio were recorded in Finland (+7.8 pp), Poland (+6.1 pp), Romania (+5.8 pp), Bulgaria (+4.3 pp), France (+3.5 pp), Slovakia (+2.7 pp), Italy (+2.3 pp), and Latvia (+2.0 pp).

At the end of the second quarter of 2025, general government debt in the euro area was composed of 84.2 per cent debt securities, 13.2 per cent loans, and 2.5 per cent currency and deposits.

In the EU as a whole, the composition was similar, consisting of 83.7 per cent debt securities, 13.8 per cent loans, and 2.5 per cent currency and deposits.

Quarterly data on intergovernmental lending (IGL) is also published due to the involvement of EU member states’ governments in lending to certain member states.

The IGL as a percentage of GDP stood at 1.4 per cent in the euro area and 1.2 per cent in the EU at the end of the second quarter of 2025.