Europe's corporate debt ranking: Which countries borrow the most?
New Eurostat data reveals stark differences in corporate debt across the EU, with seven countries exceeding the 85% of GDP warning threshold, but small financial hubs dominate the top of the list due to multinational financing structures.
New data from Eurostat shows that corporate debt levels vary widely across the European Union. Seven member states have corporate debt exceeding the European Commission's warning threshold of 85% of GDP. However, the figures are not straightforward: in some countries, high ratios reflect international financial flows rather than domestic business borrowing.
The seven countries with the highest corporate debt
Luxembourg (251.1% of GDP) – Company debt amounts to more than two and a half times annual economic output. The country hosts thousands of foreign-owned holding and financing companies whose debt is largely matched by financial assets, so the central bank says the figure is easily misunderstood. Denmark (115.4%) – Most debt is genuine borrowing by international companies like Novo Nordisk, which have turned to bond markets. Corporate bond borrowing has tripled in the past five years. Sweden (108.6%) – Debt is concentrated in commercial property, which became a major financial vulnerability after interest rates rose sharply in 2022. Cyprus (107.3%) – Similar to other financial hubs: over 80% of cross-border investment flows through special-purpose entities with little real economic activity. Netherlands (106.3%) – About 60% of corporate debt is accounted for by multinational companies managing internal financing. France (91.6%) – Unlike other high-debt countries, France's central bank considers corporate leverage a genuine macro-financial vulnerability, not a statistical distortion. Belgium (90.6%) – Many multinationals use Belgium for internal financing. When these operations are removed, debt falls to about two-thirds of GDP.
Surprise: Italy and Greece
Despite having the highest public debt in the EU, their corporate debt is relatively low: Greece at 58.6% and Italy at 55.1% of GDP, both below the EU average. This indicates that debt is concentrated in the public sector.
Why small countries dominate the ranking
Four of the top five—Luxembourg, the Netherlands, Cyprus and Belgium—are small economies serving as international financial hubs. They host thousands of holding companies and financing vehicles with limited real activity, yet they are classified as non-financial corporations. Eurostat excludes loans between companies in the same country but includes cross-border intra-group loans, inflating ratios in these hubs. Central banks in Belgium and Luxembourg publish alternative measures showing much lower domestic corporate debt.
What the ranking really shows
At first glance, it seems that companies in Luxembourg, Cyprus and the Netherlands have the most debt. In reality, the data reveal where multinationals choose to organize their finances. When the effect of international financing centres is stripped out, France emerges as the only major European economy with genuinely elevated corporate debt, posing a real macro-financial risk.
