Europe news often focuses on government borrowing, but fresh Eurostat figures show that company debt tells an equally important story across the EU. The latest data reveal a surprising map of corporate borrowing, where small financial centres dominate the rankings while some heavily indebted states in public finance terms sit well below the EU average for business debt.
According to the newest figures, seven EU countries are above the European Commission’s 85% of GDP warning line for non-financial corporate debt. Yet the headline numbers need careful reading, because in several cases the totals are boosted by multinational financing structures rather than by weak local companies.
Europe news: What the corporate debt figures actually measure
The Eurostat indicator compares the debt of non-financial corporations with national GDP. It includes:
- Bank loans
- Corporate bonds and debt securities
- Cross-border borrowing within multinational groups
It excludes banks, insurers and other financial firms, and removes loans between companies based in the same country to avoid double counting.
Across the EU, corporate debt stood at 70.1% of GDP at the end of 2025. In the euro area, it was slightly higher at 71.6%. Both are near two-decade lows, helped by strong nominal economic growth outpacing borrowing.
The seven countries with the highest business debt
- Luxembourg — 251.1%: By far the highest in the bloc, largely due to the country’s role as a global corporate finance hub.
- Denmark — 115.4%: Driven more by real borrowing, including large bond issuance by globally active Danish firms.
- Sweden — 108.6%: Debt is concentrated heavily in commercial real estate, a known financial risk after higher rates.
- Cyprus — 107.3%: Much of the debt reflects special-purpose entities and cross-border investment channels.
- Netherlands — 106.3%: Inflated by multinational financing companies and international investment flows.
- France — 91.6%: One of the clearest cases where high debt is considered a genuine macroeconomic concern.
- Belgium — 90.6%: Boosted by intra-group multinational financing activities based in the country.
For several of these economies, especially Luxembourg, Cyprus, the Netherlands and Belgium, the numbers say as much about tax-efficient finance structures as they do about domestic business balance sheets.
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Why the 85% threshold matters
The European Commission uses the 85% benchmark under its Macroeconomic Imbalance Procedure. Crossing that line does not automatically mean crisis. Instead, it acts as an early warning signal that prompts closer assessment.
That distinction matters. In major financial centres, company debt can be exaggerated by cross-border intra-group lending. In other countries, however, elevated debt may reflect genuine pressure on firms from higher interest costs or leverage built up over time.
France stands out, while Italy and Greece go the other way
Among large EU economies, France is the biggest outlier. Its central bank has repeatedly flagged corporate leverage as a real vulnerability, even after taking company cash holdings into account. That makes France different from countries where the debt stock is mostly a statistical effect of multinational structures.
By contrast, Greece and Italy tell the opposite story. Despite carrying some of the heaviest public debt burdens in the EU, their corporate sectors are relatively modest borrowers. Corporate debt was 58.6% of GDP in Greece and 55.1% in Italy, both below the EU average.
This split highlights a key point in irish news and wider EU economic reporting: high state debt does not automatically mean high corporate debt, and vice versa.
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Why small financial hubs top the ranking
Four of the top five countries are relatively small economies. Their position is largely explained by:
- Large numbers of holding companies
- Special-purpose financing entities
- Cross-border internal lending by multinational groups
- International tax and treasury management structures
This is why headline ratios can look dramatic without necessarily signalling widespread stress in the domestic economy.
What this means for Europe and Ireland
The main takeaway from this Europe news story is simple: not all corporate debt is created equal. In some countries, the figures mostly reflect how global companies organise money flows. In others, especially France, Sweden and Denmark, the debt burden appears more closely tied to real economic risk. For readers following ireland news, the lesson is clear: debt rankings matter, but context matters even more.
