Europe's corporate debt landscape is a complex web, and the countries that top the rankings may not be what you'd expect. While governments often take center stage in debt discussions, companies are also significant borrowers, and their debt levels vary widely across the European Union. The latest Eurostat data reveals a striking divide, with some of Europe's largest economies having relatively modest corporate debt, while several smaller financial hubs top the ranking.
The indicator used compares the debt of non-financial corporations with each country's gross domestic product (GDP). It includes bank loans and debt securities like corporate bonds, excluding banks, insurers, and other financial institutions. Loans between companies in the same country are also removed to avoid double counting. At the end of 2025, corporate debt across the EU stood at 70.1% of GDP, with the eurozone at 71.6%. Both figures are near their lowest in almost twenty years, indicating strong economic growth outpacing corporate borrowing.
The 85% of GDP threshold set by the European Commission serves as a warning line for potentially excessive private-sector borrowing. Crossing this threshold doesn't automatically signal financial distress or trigger sanctions. Instead, it prompts the Commission to assess whether high debt reflects genuine economic vulnerabilities or structural factors. Among the seven European countries with the highest corporate debt, Belgium (90.6% of GDP) stands out due to its role as a base for multinational companies managing internal financing. The National Bank of Belgium estimates that removing internal financing operations, company debt falls to around two-thirds of GDP, much lower than the Eurostat figure.
France (91.6% of GDP) is another notable case. Its elevated corporate debt is considered a genuine macroeconomic issue, not just a statistical artefact. The Banque de France identifies French companies as the most indebted among the eurozone's largest economies, even after accounting for cash holdings. The central bank warns of relatively high debt-servicing costs for French businesses compared to their European peers.
The Netherlands (106.3% of GDP) owes its high ranking to its role as an international financial center. Multinational companies account for around 60% of all company debt recorded in the country, much of it consisting of financing between different parts of the same corporate group. The Dutch central bank highlights the country's large network of companies that channel international investment without significant business activity in the Netherlands.
Cyprus (107.3% of GDP) follows a similar pattern on a larger scale. The European Central Bank estimates that companies with little or no real economic activity account for the majority of the country's international assets and liabilities. More than 80% of cross-border investment flowing through Cyprus is channeled via special-purpose entities, leading to a large share of debt reflecting international financing structures rather than borrowing by businesses active in the Cypriot economy.
Sweden (108.6% of GDP) is one of the few countries near the top where debt mainly reflects borrowing by domestic companies, concentrated in commercial property. Swedish real estate companies borrowed heavily during low-interest rates, financing through banks and bond markets. When interest rates rose sharply after 2022, the sector became a financial vulnerability.
Denmark (115.4% of GDP) also has genuine high company debt. The country's biggest international companies, including Novo Nordisk, DSV, Carlsberg, and Ørsted, have turned to international bond markets for expansion. Corporate bond borrowing has tripled in the past five years, with most debt held by foreign investors and issued through subsidiaries based outside Denmark.
Luxembourg (251.1% of GDP) stands alone with the highest ratio in the EU. The country's central bank clarifies that the figure is easily misunderstood, as it hosts thousands of foreign-owned holding and financing companies whose debt is largely matched by financial assets. This reflects Luxembourg's role as a leading center for international corporate finance, not excessive borrowing by domestic businesses.
A surprise emerges at the other end of the ranking, where Italy and Greece have the highest public debt burdens (146% and 137% of GDP, respectively) but their corporate sectors remain among the least indebted in the eurozone. Corporate debt in Greece and Italy is primarily concentrated in the public sector, well below the EU average.
The dominance of small countries at the top of the ranking is explained by their role as international financial hubs. These countries host thousands of holding companies and financing vehicles used by multinational corporations to manage investments and internal funding across borders. While these entities often have limited economic activity in the host country, they are classified as non-financial corporations in official statistics. This, combined with methodological details, contributes to the high figures.
In conclusion, the ranking reveals as much about multinational corporations' financial organization as it does about borrowing by domestic businesses. Once the effect of international financing centers is stripped out, the picture changes. France emerges as a notable outlier, the only major European economy with both high public debt and genuinely elevated corporate indebtedness. This highlights the need for a nuanced understanding of corporate debt, considering both its macroeconomic implications and the complex role of international financial centers.
