01 — The gap
Spending exceeds revenue
A deficit appears when government expenditure is higher than government revenue during a budget period. That deficit is a flow: it is measured over time.
EU Debt Map · Visual guide 01
What is government debt?
It starts as a gap in one budget and becomes a financial promise that can last for decades.
Trace how deficits become bonds, how bonds become public debt and why the size of the economy matters as much as the number itself.
Reviewed 28 August 20268-minute visual guideOfficial EU definitions
Illustrative public budgetOne period
Revenue€94
Spending€100
Annual deficit€6
Added to debt+€6
Government debt in one sentence
Government debt is the outstanding amount a state still owes after borrowing.
In EU statistics, government debt is measured as consolidated gross debt at nominal value. It covers the currency and deposits, debt securities and loans that remain outstanding for the general government sector.
Eurostat definition of quarterly government debt01RevenueMoney coming in
−02SpendingMoney going out
=03DeficitThe period’s gap
→04BorrowingBonds and loans
→05DebtThe remaining stock
The borrowing cycle
How government debt works
Follow one euro of new borrowing from the budget gap to the outstanding debt stock. Scroll through the four stages; the diagram stays fixed while the mechanism changes.
02 — The bond
The government borrows
The treasury raises money by issuing debt securities or taking loans. Investors provide cash now in exchange for a promise of future repayment and interest.
03 — The cost
Interest enters the budget
Interest payments become part of future government expenditure. The cost depends on the amount borrowed, the maturity of the debt and the yields investors demand.
04 — The stock
Deficits accumulate as debt
Outstanding borrowing remains on the balance sheet until it is repaid. Maturing bonds are often refinanced, so debt can persist even when an individual bond disappears.
One borrowing cycleStage 1 / 4
01Public budgetRevenue falls short
02TreasuryIssues a bond
03InvestorsProvide cash
04Future budgetsPay interest or refinance
Interactive model
A deficit is a flow. Debt is the stock it leaves behind.
Move the controls to see how repeated annual deficits add to the outstanding debt balance. This simplified model excludes interest, growth, inflation, repayments and valuation changes.
Illustrative calculation, not a forecast. A surplus or repayment would reduce the stock instead.
After 10 years€1,100 bn
Added debt+€300 bn
Who holds government debt?
A government’s liability is someone else’s asset.
Banks, pension funds, insurers, investment funds, households, foreign investors and central banks can all hold government bonds. Some investors buy them for income, others for liquidity, collateral or long-term matching of liabilities.
The ownership mix matters because it affects demand, refinancing conditions and how financial stress can spread between governments, banks and markets.
ECB analysis of government debt holdersWhen does debt become a problem?
The number alone is not the verdict.
Debt pressure emerges from the interaction between the debt stock, borrowing costs, economic growth and confidence in public institutions.
01
Interest costs
Higher yields gradually raise the cost of refinancing and can absorb more public revenue.
02
Economic growth
A growing economy can make an unchanged debt stock easier to carry relative to national income.
03
Debt maturity
Longer maturities slow the speed at which market rates feed into the government’s interest bill.
04
Market confidence
Credible institutions and fiscal plans influence whether investors continue to lend at manageable rates.
EU context · 2026-Q1
Public debt is shared unevenly across Europe.
Sum of available national observations€15.9tn27 EU countries at the common reference period
This is EU Debt Map’s sum of national Eurostat observations for scale, not Eurostat’s separately consolidated EU aggregate. Loans between Member States can require different consolidation in an official EU aggregate. Read the methodology.
Why debt-to-GDP matters
€500 billion does not mean the same thing in every economy.
Debt-to-GDP compares the debt stock with one year of economic output. It does not measure affordability perfectly, but it provides a common scale for countries of very different sizes.
The EU treaty reference value is 60% of GDP. It is a fiscal reference, not an automatic line between “safe” and “unsafe”: direction, interest costs, maturity, growth and institutional credibility still matter.
60%
0%EU reference value120%+
Reference point, not a standalone sustainability test.
Questions, answered
Government debt FAQ
01Is all government debt bad?
No. Borrowing can finance investment or help stabilise the economy during a downturn. What matters is why the money is borrowed, the interest cost, the growth of the economy and whether the debt remains manageable.
02What is the difference between government debt and a deficit?
A deficit is the shortfall during one budget period when expenditure exceeds revenue. Government debt is the outstanding stock left by past borrowing, after repayments and other changes.
03Who owns government debt?
Government bonds can be held by banks, pension funds, insurers, investment funds, households, foreign investors and central banks. The mix differs by country and maturity.
04Do governments have to repay all debt at once?
No. Bonds mature at different dates. Governments normally repay or refinance maturing debt over time, while continuing to issue new debt when funding is needed.
05Why is debt compared with GDP?
Debt-to-GDP compares the debt stock with the size of the economy. It is more useful for comparing countries than the raw debt amount alone, although it does not by itself determine whether debt is sustainable.
Evidence and definitions
Primary sources
The guide was reviewed against official European statistical definitions and institutional documentation on 28 August 2026.
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