Bucharest, July 21, 2025 – RBJ – Installed for almost a month, by the decision of the Parliament, the new government in Bucharest, a mixed one, with right and left currents, shows an indecipherable lack of power to make structural reforms to reduce public debt and increase budget revenues. PM Ilie Bolojan to moan loudly and loudly that the country is in an economic impasse due to the fact that external debt and foreign loans are exhausting the economy. As such, major investments are starting to freeze and thousands of workers are becoming unemployed. Measures that lead to the exact opposite of the intentions to “save” the economy.
The new government’s main focus is public debt. Romania has a public debt roughly in the second part of the level of this indicator among EU countries, of 55.8% in Q1 2025. Much lower than that of Hungary, Poland, or other Central and Eastern European countries.
At the end of the first quarter of 2025, the general government gross debt to GDP ratio in the euro area (EA20) stood at 88.0%, compared with 87.4% at the end of the fourth quarter of 2024. In the EU, the ratio also increased from 81.0% to 81.8%.
Compared with the first quarter of 2024, the government debt to GDP ratio increased in both the euro area (from 87.8% to 88.0%) and the EU (from 81.2% to 81.8%).
At the end of the first quarter of 2025, the general government debt was made up of 84.2% debt securities in the euro area and 83.6% in the EU, 13.3% loans in the euro area and 13.9% in the EU and 2.6% currency and deposits in the euro area and 2.5% in the EU.
Due to the involvement of EU Member States’ governments in lending to certain Member States, quarterly data on intergovernmental lending (IGL) are also published. The IGL as percentage of GDP at the end of the first quarter of 2025 stood at 1.4% in the euro area and at 1.2% in the EU.
The highest ratios of government debt to GDP at the end of the first quarter of 2025 were recorded in Greece (152.5%), Italy (137.9%), France (114.1%), Belgium (106.8%) and Spain (103.5%), and the lowest were recorded in Bulgaria (23.9%), Estonia (24.1%), Luxembourg (26.1%) and Denmark (29.9%).
Compared to the debt level in December 2024, in Romania this indicator increased by 1% in Q1 2025. In Poland it increased by 2.2%. The Polish government did not declare a state of emergency as the Bucharest government did. It knows that public debt will continue to increase given the country’s armament programs.
Compared with the fourth quarter of 2024, sixteen Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2025, ten registered a decrease, and the ratio remained stable in Czechia. The largest increases in the ratio were observed in Austria and Slovakia (both +3.5 percentage points – pp), Slovenia (+2.9 pp), Italy (+2.5 pp), Lithuania (+2.4 pp), Poland (+2.2 pp) and Belgium (+2.1 pp). The largest decreases were recorded in Ireland (-3.7 pp), Latvia (-1.2 pp), and Greece (-1.1 pp).
Compared with the first quarter of 2024, thirteen Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2025, twelve Member States registered a decrease, and the ratio remained stable in Slovenia and Estonia. The largest increases in the ratio were recorded in Poland (+6.1 pp), Finland (+5.1 pp), Austria and Romania (both +4.1 pp), France (+3.6 pp), Italy (+2.9 pp), Slovakia (+2.6 pp), and Sweden (+2.0 pp). The largest decreases were observed in Greece (-9.3 pp), Cyprus (-8.2 pp), Ireland (-6.1 pp), Croatia (-3.6 pp), Denmark (-3.2 pp), Spain (-2.8 pp), and Portugal (-2.7 pp).
