Europe's total debt hits record high above $95T in H1

Total debt across 32 European nations topped $95 trillion in the first half of 2026 to reach a record high, the Institute of International Finance said on Thursday.

Rising borrowing costs and political uncertainties are making it increasingly difficult to stabilize debt levels across the region, according to the institute's European edition of the Global Debt Monitor report.

Europe's debt pile accounted for approximately 25% of global debt during the six-month period, while the region's debt-to-gross domestic product ratio stood at around 325%.

The ratio remained more than 45 percentage points below levels seen at the onset of the eurozone debt crisis, the report noted.

France posted Europe's largest debt stock at $15.5 trillion, followed by the UK at $14.7 trillion, Germany at $13.5 trillion and Italy at $7.2 trillion.

Across economic sectors, financial institutions held the largest share of outstanding debt at $30.4 trillion, followed by non-financial corporations at $26.4 trillion, public debt at $22.5 trillion and household debt at $15.7 trillion.

France experienced the sharpest rise in borrowing costs among EU members this year, with its five-year credit default swap spread rising above 100 basis points to its highest level since late 2012, while Italy's spread stood near 75 basis points.

The report warned that persistent budget deficits, higher borrowing costs and shrinking fiscal buffers in a difficult political climate make stabilizing debt trajectories harder for European governments.

Heavy reliance on foreign investors to fund fiscal shortfalls leaves regional governments vulnerable to shifts in global risk sentiment and cross-border capital flows, the institute said.

Political gridlock could reignite market tensions as debt concerns increasingly concentrate in Europe's largest economies, raising the risk of broader financial spillovers, the report added.