EU Debt Set to Exceed €1 Trillion, Study Warns

The European Union’s total debt could rise from roughly €800bn today to €1.15tn by 2030, according to an analysis by the Leibniz Centre for European Economic Research (ZEW) in Mannheim.

Researchers estimate that common EU liabilities would then account for around 7% of the combined public debt of member states.

The study argues that the EU is already relying on joint borrowing mechanisms that are often overlooked in debates about so-called Eurobonds. Most of the funds raised through these programs are distributed to member states in the form of loans and grants.

According to ZEW, countries with weaker credit ratings tend to make greater use of the loans, while the borrowing is ultimately backed by guarantees from economically stronger member states.

The institute warns that liabilities arising from these guarantees are not currently reflected in national public debt statistics, which it says obscures the true scale of governments’ financial commitments.

ZEW therefore recommends that the EU avoid creating new lending programs for member states under the 2028-2034 Multiannual Financial Framework. Instead, it argues for a stronger role for the European Stability Mechanism and for future repayment obligations to be included in national debt figures.

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