Eurostat data reveals France as Europe's true corporate debt outlier
New Eurostat figures show seven EU states breaching a corporate debt warning threshold, but only France faces a genuine macroeconomic risk among major economies.
Corporate debt across the European Union stood at 70.1% of GDP at the end of 2025, near a two-decade low. Yet seven member states still exceed the European Commission's 85% of GDP warning threshold, a list dominated by small financial hubs rather than major industrial economies.
Luxembourg tops the ranking at 251.1% of GDP, followed by Denmark, Cyprus, Sweden, the Netherlands, France and Belgium. In Luxembourg, the Netherlands, Cyprus and Belgium, the high ratios are largely statistical artefacts. These countries host thousands of multinational holding companies used to route cross-border investments.
A key methodological quirk inflates these figures. Eurostat excludes lending between companies within the same country to avoid double counting, but it includes such financing when it crosses borders. Central banks in Belgium and the Netherlands have noted that stripping out these special-purpose entities drops their debt ratios to far more ordinary levels.
Denmark and Sweden also rank highly, but their debt stems from identifiable domestic trends. According to Danmarks Nationalbank, corporate bond borrowing in Denmark has tripled in five years as global giants like Novo Nordisk and DSV tap international capital markets. In Sweden, borrowing is heavily concentrated in the commercial property sector, which became a major financial vulnerability after interest rates rose in 2022.
France presents the most significant concern for European markets. At 91.6% of GDP, its corporate debt is not a product of financial routing. The Banque de France has identified French companies as the most indebted among the eurozone's largest economies, warning that debt-servicing costs remain high even after accounting for large corporate cash holdings.
This contrasts sharply with southern Europe. Despite shouldering the bloc's highest public debt at 146% and 137% of GDP respectively, corporate borrowing in Greece and Italy sits at just 58.6% and 55.1%.
For investors and policymakers, the dataset is a reminder that headline debt ratios often measure financial routing rather than economic fragility. The exception is France, where corporate leverage remains a tangible macro-financial vulnerability for the wider eurozone.
