Structure of government debt – Statistics Explained

General government gross (Maastricht) debt as a percentage of GDP

Maastricht debt followed an upward trend after the 2008 financial crisis. From a high point at the end of 2014 (87.2 % of GDP), at EU level, the debt to GDP ratio decreased continuously to reach 77.8 % of GDP at the end of 2019. Then, the ratio increased sharply in 2020 to 90.0 % of GDP, mainly due to the effects of the COVID-19 pandemic. The 2020 increase represents the steepest increase observed in the time series since 1995, and the highest level of general government gross debt as percentage of GDP recorded.

Between the end of 2020 and the end of 2023, the EU general government gross debt decreased by -8.3 percentage points (pp) to 81.7 % of GDP. Compared to the end of 2022, the ratio in 2023 decreased by -1.7 pp of GDP. In the euro area, the general government gross debt decreased from 90.8 % of GDP at the end of 2022 to 88.6 % at the end of 2023 (or by -2.3 pp).

Figure 1: General government gross debt as a percentage of GDP, 2022–2023 – Source: Eurostat (gov_10dd_edpt1)

Between the end of 2022 and the end of 2023, 18 EU countries registered a decrease in their debt to GDP ratio, and 9 EU countries and Norway registered an increase. The largest decreases were recorded in Portugal (-13.3 pp), Greece (-10.8 pp), Cyprus (-8.3 pp), Croatia (-4.8 pp) and Spain (-4.0 pp), while increases were recorded in Finland (+2.3 pp), Latvia (+1.8 pp), Romania (+1.3 pp), Estonia (+1.1 pp), Luxembourg and Belgium (both +0.9 pp), Bulgaria (+0.5 pp), Poland (+0.4 pp) and Lithuania (+0.2 pp), as well as Norway (+7.8 pp).

At the end of 2023, 13 out of 27 EU countries reported debt to GDP ratios higher than 60.0 %, while five EU countries recorded debt to GDP ratios of more than 100.0 %: Greece recorded the highest debt to GDP ratio at 161.9 %, followed by Italy (137.3 %), France (110.6 %), Spain (107.7 %) and Belgium (105.2 %).

At the end of 2023, the lowest debt to GDP ratio was registered by Estonia at 19.6 % of GDP, followed by Bulgaria (23.1 %), Luxembourg (25.7 %), Denmark (29.3 %), Sweden (31.2 %), Lithuania (38.3 %) and Norway (44.3 %).

Breakdown by subsector of general government

According to ESA 2010, the general government sector (S.13) is divided into four subsectors:

Figure 2 gives an overview of the subsector breakdown, as a percentage of total debt for all subsectors, i.e. not consolidated between different levels of government.

For 25 of the 27 EU countries, the central government represented more than 75 % of the general government debt (not consolidated between subsectors) at the end of 2023, while other subsectors of general government had a comparatively large share in Sweden (41 %) and Germany (30 %), as well as in Norway (33 %).

Local government debt played an important role in Sweden (40 %), Denmark (21 %), Finland (17 %), Estonia (13 %) and Latvia (11 %). The share of local government debt (non-consolidated between subsectors) was also important in Norway (33 %).

In Germany (23 %), Spain (17 %) and Belgium (16 %), state governments accounted for a significant share in the total gross debt (not consolidated between subsectors). State government as a subsector of general government exists only in four EU countries, namely, Belgium, Germany, Spain and Austria. The debt share of state government was 7 % in Austria.

The impact of social security funds on the general government debt continues to be relatively small: contributions of less than 5 % were recorded in 23 countries (out of the 25 reporting countries with a social security funds’ subsector). Only two countries had somewhat higher ratios of debt for social security funds: France (8.2 %) and Spain (6.1 %).

Impact of consolidation

The general government debt has to be consolidated within each subsector and between subsectors at the level of general government. This implies that the debt issued by one subsector and held by another one should be excluded from the general government debt. When debt of one subsector of general government is held by another subsector, general government gross debt is then lower than the sum of subsector gross debt. Table 1 illustrates this effect in percentage of total non-consolidated debt (consolidated within subsectors but not between).

For 16 of the 27 EU countries and Norway, the consolidation between the subsectors of general government had a limited impact, reducing the general government debt by less than 5 %. A significant consolidation effect was observed in Cyprus (47 %), Latvia (24 %), Spain (21 %), Estonia (18 %) and the Netherlands (17 %). Significant consolidation effects are often due to central government liabilities in deposits held by local government and social security funds, for example in Estonia, Latvia and Cyprus. The level of consolidation tends to be influenced by the growing prevalence of cash pooling arrangements.

On the other hand, seven countries showed no consolidating amounts between subsectors of general government or consolidating amounts below 1 %: Denmark, Croatia, Lithuania, Luxembourg, Malta, Slovenia and Norway.

Breakdown by financial instrument

The Maastricht debt is composed of the stock of liabilities in the following financial instruments according to the ESA 2010 classification:

• currency and deposits (AF.2);
• debt securities (AF.3); and
• loans (AF.4).

The breakdown of debt by financial instrument is presented in Figure 3.

Figure 3: General government gross debt by financial instrument, 2023 – Source: Eurostat (gov_10dd_ggd)

Data for 2023 show that for the EU, debt securities represented 82.9 % of the general government gross debt, loans represented 14.4 %, and currency and deposits represented 2.7 %. For the euro area, debt securities represented 83.4 % of the general government gross debt, loans represented 13.8 %, and currency and deposits represented 2.8 %.

For 25 of the 27 EU countries, the most used debt instrument remained debt securities at the end of 2023. The share of debt securities in general government gross debt ranged from 25.8 % in Greece and 48.9 % in Estonia, to 91.2 % in Czechia.

Greece (72.2 %) and Estonia (49.9 %) as well as Norway (66.6 %) registered high shares of loans. Significant loan to total debt ratios were also recorded for Cyprus (39.2 %), Sweden (36.7 %) and Croatia (29.1 %). The countries reporting a higher share of loans tended to be those either having a relatively low level of general government gross debt (e.g. Estonia), a relatively high share of debt of subcentral sectors of government (e.g. Sweden) or having benefited in recent years from loans of EFSF, ESM, IMF and other international institutional financing (e.g. Greece and Cyprus).

At the end of 2023, currency and deposits represented less than 5 % of total debt for 23 countries. In contrast, currency and deposits accounted for 18.4 % of total general government gross debt in Portugal (due to saving certificates), 11.7 % in Ireland (due to defeasance structures), 7.0 % in Italy and 6.7 % in Sweden (due to saving certificates).

Breakdown by sector of debt holder

Figure 4 presents general government gross debt by sector of the debt holder: non-financial residents (non-financial corporations, households and non-profit institutions serving households), financial residents (financial corporations) and non-residents (rest of the world).

Figure 4: General government gross debt by sector of debt holder, 2023 – Source: Eurostat (gov_10dd_ggd)

At the end of 2023, among the 26 EU countries for which data was available, government debt was mainly held by the resident financial corporations sector in 12 EU countries. Its share was the highest in Sweden (74.6 %), followed by Denmark (72.3 %), Czechia (69.9 %) and Croatia (64.6 %). At the other end of the scale, the smallest proportion of debt held by resident financial corporations was recorded in Cyprus (2.8 %), ahead of Estonia (18.9 %), Latvia (30.2 %), Ireland (34.1 %), Lithuania (35.4 %), Austria (35.7 %) and Belgium (37.7 %) as well as Norway (37.1 %).

The debt share held by non-residents (rest of the world sector) was significant in 14 EU countries, and Norway, with shares of 42.0 % and higher. Among the countries with the highest share of non-resident sector as debt holder were: Cyprus (95.7 %), Estonia (79.8 %), Latvia (66.6 %), Austria (64.1 %) and Lithuania (63.2 %), as well as Norway (60.6 %). In contrast, this proportion was only 16.9 % in Sweden, 21.8 % in Malta, 23.7 % in Czechia, 27.2 % in Denmark, 27.6 % in Italy and 29.5 % in Croatia.

The resident non-financial sectors (non-financial corporations, households and non-profit institutions serving households) played a major role as debt holder in Malta (23.6 %), Hungary (23.4 %), Portugal (18.0 %), Italy (13.4 %) and Ireland (11.7 %).

Breakdown by original/initial maturity

The debt survey aims to provide detailed information on the time structure of government debt based on its original maturity. The maturity is subdivided into several maturity brackets: less than one year, one to five years, five to seven years, seven to ten years, ten to fifteen years, fifteen to thirty years, and more than thirty years, as well as the summary category of more than one year. For some countries, which did not provide the complete breakdown, only two categories are shown: less than one year (short-term) and more than one year (long-term). For the other 19 countries, a detailed debt maturity breakdown is available. The debt structure by initial maturity (share of short-term and long-term debt to total debt) is illustrated in Figure 5.

Figure 5: General government gross debt by initial maturity, 2023 – Source: Eurostat (gov_10dd_ggd)

General government gross debt classified by maturity reveals a common pattern: between 69.5 % (in Sweden) and nearly 100 % (in Lithuania) of the outstanding debt was incurred on a long-term basis. Short-term debt levels of less than or equal to 1 % were recorded in Lithuania (0.0 %), Bulgaria (0.3 %), Slovakia (0.6 %) and Cyprus (0.8 %).

The short-term debt ratio was significant in Sweden (30.5 %), followed by Portugal (19.5 %), Finland (13.0 %) and Italy (12.5 %), as well in Norway (28.6 %).

The countries providing a detailed long-term debt breakdown showed very different structures. This is shown in Figure 6.

Figure 6: General government gross debt by detailed initial maturity, 2023 – Source: Eurostat (gov_10dd_ggd)

Breakdown by remaining maturity

While the initial or original maturity of debt measures the time between issuance date and redemption date, the remaining maturity of debt measures the time left until the redemption date.

Figure 7 shows the share of central government gross debt with a remaining maturity of less than one year, at end 2022 and at end 2023, i.e. the share of the central government debt which was to be redeemed in 2023 and is due to be redeemed during 2024.

Data is available for 22 out of the 28 countries having completed the survey.

At the end of 2023, the highest shares of short-term remaining maturity in total central government debt were reported by Sweden (37.9 %), ahead of Estonia (28.4 %), Portugal (26.4 %), Germany and Italy (both 23.3 %, estimated for Germany), and Latvia (22.1 %), while the lowest shares were observed for Bulgaria (8.5 %) and Slovenia (9.8 %).

The largest reductions in the share of short-term remaining maturity of debt between the end of 2022 and the end of 2023 were observed for Sweden (-10.0 pp), Romania (-3.6 pp) and Malta (-3.4 pp), whereas the largest increases in the shares were noted for Ireland and Lithuania (both +3.4 pp) and Slovenia (+3.0 pp).

Figure 7: Share of central government gross debt with remaining maturity of less than one year, 2022-2023 – Source: Eurostat (gov_10dd_rmd)

Breakdown by currency of denomination

As shown in Figure 8, for the vast majority of the current euro area members, all or almost all (more than 99.5 %) of their central government gross debt at face value was denominated in national currency (€) at end of 2023. (Please see the notes below.)

Similarly, for Denmark, Czechia and Sweden, over 90 % of their central government gross debt was denominated in their national currency.

There were only 2 EU countries where more than 50% of their central government gross debt was denominated in foreign currencies at the end of 2023: Bulgaria (75 %, note that Bulgaria has a currency board arrangement vis a vis the euro) and Romania (51 %). For Hungary (30 %) and Poland (24 %), significant shares of foreign currency debt are noted, too. The major share of all non-euro area EU countries’ foreign currency debt at the end of 2023 was denominated in euro.

Figure 8: Central government gross debt by currency of issuance, % of total, 2023 – Source: Eurostat (gov_10dd_dcur)

Figure 9 presents the share of outstanding central government debt issued in euro at the end of 2023. The debt denominated in euro is equal to the debt issued in national currency for the 20 EU countries, which were part of the euro area at the end of 2023. All general government debt was denominated in euro or swapped into euro in Belgium, Estonia, Ireland, France, Cyprus, Latvia, Lithuania, Luxembourg and Finland. A share higher than 99 % of total central government gross debt was denominated in euro in Germany, Greece, Spain, Croatia, Italy, Malta, the Netherlands, Austria, Portugal, Slovenia and Slovakia.

In contrast, the major issuing currency in the non-euro countries were their national currencies: Denmark (96.4 % issued in Danish krone), Czechia and Sweden (93.2 % issued in Czech koruna and in Swedish krona respectively), Poland (75.6 % issued in Polish zloty) and Hungary (70.5 % issued in Hungarian forint).

Figure 9: Central government gross debt with euro as issuing currency, % of total, 2023 – Source: Eurostat (gov_10dd_dcur)

Apparent cost of government debt

The apparent cost of general government debt (i.e. the ratio of accrued interest expenditure as a percentage of the average debt over the year) shows the past and present conditions countries encounter when accessing the financial markets. In general, as long as debt issued is not indexed on inflation measures, this measure of the cost of debt depends on interest rates prevailing at the moment of issuance in the past, and it is normally not very sensitive to the most recent market trends, provided that the composition of debt is mainly long-term.

Based on the replies of 27 EU countries and Norway, the estimates of apparent cost of general government debt are shown in Figure 10.

Figure 10: Apparent cost of general government gross debt, 2022-2023 – Source: Eurostat (gov_10dd_acd)

In 2023, the highest apparent cost of general government gross debt was reported by Hungary (6.8%), followed by Poland and Romania (both 4.5%). The lowest apparent cost of general government gross debt was noted for Luxembourg (1.2%), followed by the Netherlands and Germany (both 1.4%).

In all EU countries except Italy, Denmark and France the apparent cost of the government debt increased between 2022 and 2023, mainly due to new issuances carrying a higher interest than debt redeemed. The slow down of inflation measures in some countries in 2023 had an opposing effect.

The largest increases were observed for Hungary (+2.7 pp.), followed by Estonia (+1.8 pp.), Poland (+1.2 pp.) as well as Romania and Finland (both +1.1 pp.). In Denmark (-0.6 pp.), Italy (-0.3 pp.) and France (-0.2 pp.), decrease in the apparent cost are observed.

Government guarantees as a percentage of GDP

The survey collects also data about guarantees granted by general and central government to non-government units. These guarantees (both ‘one-off’ and ‘standardised’) are not part of government gross debt, as they are contingent liabilities, being contingent on the actual call of the guarantee.

The ratio of government guarantees provided by central government on debt of non-government units as a percentage of GDP, is shown in Figure 11. At the end of 2023, the amount of government guarantees exceeded 10 % of GDP in three countries: Italy (15.5 %), Greece (11.2 %) and Austria (10.7 %), out of 24 countries reporting data for 2023. At the end of 2022 for which data is also available for all EU countries, the ratio of 10 %-to-GDP was exceeded in Italy, Germany, Hungary, Greece and Austria.

At the end of 2023, a ratio to GDP of less than 5 % was recorded in Ireland (0.2 %), Bulgaria (0.4 %), Czechia (0.6 %), Slovakia (1.0 %), Lithuania (1.1 %), Estonia (1.2 %) and Latvia (1.5 %).

Between 2022 and 2023, ratio of the stock of guarantees granted by central governments as a percentage of GDP decreased in 18 of the 24 countries for which data is available. The largest decreases were reported by France (-1.2 pp), Slovenia (-1.1 pp), Greece (-1.0 pp) and Austria (-0.9 pp), Malta (-0.8 pp) and Portugal (-0.7 pp) and Italy (-0.6 pp), while data for Denmark shows the largest increase (1.1 pp).

Figure 11: Central government guarantees as a percentage of GDP, 2022-2023 – Source: Eurostat (gov_10dd_guar)