Greece will continue to be the champion in debt reduction in the eurozone in the coming years, according to Scope Ratings, which estimates that by 2031 the Greek debt ratio will be lower than that of Italy, France and Belgium and close to the levels of Finland. Away from being the most indebted country in the eurozone, Scope notes, Greece will move very close to the average.
The German ratings agency predicts the eurozone’s total debt will increase to around 90% of GDP by 2031, from 88% in 2025 and below the peak of 97% in 2020.
However, this steady trend masks significant differences between countries.
The main risks to long-term debt sustainability are concentrated in several countries with high debt levels and in those with deteriorating fiscal dynamics, where an increasing share of future budgets will be used to cover rising interest payments.
Some of the structural pressures are more pronounced in several highly rated countries, while countries that have implemented structural reforms, particularly since the Eurozone crisis, continue to improve their credit profiles.
