Eurozone Deficit Narrows to 2.9% in 2025

The Eurozone’s government deficit-to-GDP ratio fell to 2.9% in 2025, a slight improvement from the revised 3.0% in 2024.

However, seven member states still exceeded the EU’s 3% deficit ceiling, with Belgium (-5.2%) and France (-5.1%) recording the highest shortfalls.

Among other major economies, Italy’s deficit narrowed to 3.1%, down from 3.4% in 2024, but remained above the EU limit, dashing hopes of exiting the bloc’s disciplinary procedure before its 2027 election.

Meanwhile, Germany (-2.7%), Spain (-2.4%), and the Netherlands (-1.6%) stayed below the threshold.

For the EU as a whole, the deficit ratio remained unchanged at 3.1%, with Romania (-7.9%) and Poland (-7.3%) posting the largest deficits.

Looking ahead, borrowing is expected to increase this year as European governments ramp up military spending to counter Russia’s threat and support households and businesses facing higher energy costs following US and Israeli attacks on Iran.