When Europe worries about debt, attention usually turns to governments. But companies borrow too, and the countries where firms owe the most are not the ones you might expect.
New Eurostat data show that corporate debt varies sharply across the European Union. Seven member states have corporate debt exceeding the European Commission’s warning threshold of 85% of GDP, although with some caveats.
The figures reveal a striking divide: some of Europe’s largest economies have relatively modest corporate debt, while several of the bloc’s smallest financial hubs top the ranking.
What the numbers measure
The indicator compares the debt of non-financial corporations with each country’s gross domestic product.
It includes bank loans and debt securities such as corporate bonds, while excluding banks, insurers and other financial institutions.
Loans between companies located in the same country are also removed to avoid double counting.
Across the European Union, corporate debt stood at 70.1% of GDP at the end of 2025.
Within the eurozone, the ratio was slightly higher at 71.6%. Both figures are close to their lowest level in almost twenty years, reflecting strong nominal economic growth in recent years that has outpaced the increase in corporate borrowing.
Why the 85% warning line matters
The European Commission uses an 85% of GDP threshold as part of its Macroeconomic Imbalance Procedure.
The benchmark was introduced after the global financial crisis and the eurozone sovereign debt crisis as an indicator of potentially excessive private-sector borrowing.
Crossing the threshold does not automatically signal financial distress or trigger sanctions.
Instead, it prompts the Commission to assess whether high debt reflects genuine economic vulnerabilities or structural factors that inflate the statistics.
The seven European countries with the highest corporate debt
7. Belgium — 90.6% of GDP
Belgium’s position is largely the result of its long-standing role as a base for multinational companies managing internal financing.
For years, international groups established financing companies in Belgium to take advantage of favourable tax arrangements. Much of the debt therefore represents intra-group financing rather than borrowing by Belgian operating companies.
The National Bank of Belgium estimates that once these internal financing operations are removed, company debt falls to around two-thirds of GDP, much lower than the Eurostat figure.
6. France — 91.6% of GDP
France is different.
Unlike several countries higher in the ranking, its elevated corporate debt is generally regarded as a genuine macroeconomic issue rather than a statistical artefact.
The Banque de France has repeatedly identified French companies as the most indebted among the eurozone’s largest economies. Even after accounting for the significant cash holdings of many firms, leverage remains well above the eurozone average.
The central bank has also warned that French businesses face relatively high debt-servicing costs compared with many of their European peers.
5. Netherlands — 106.3% of GDP
The Netherlands owes much of its high ranking to its role as an international financial centre.
According to the European Commission, multinational companies account for around 60% of all company debt recorded in the country. Much of that debt consists of financing between different parts of the same corporate group.
The Dutch central bank has long pointed to the country’s large network of companies that channel international investment without carrying out significant business activity in the Netherlands itself.
Once these companies are excluded, Dutch company debt appears far less unusual.
4. Cyprus — 107.3% of GDP
Cyprus follows a similar pattern on an even larger scale.
The European Central Bank estimates that companies with little or no real economic activity account for the majority of the country’s international assets and liabilities.
More than 80% of cross-border investment flowing through Cyprus is channelled via these special-purpose entities.
As a result, a large share of the debt recorded in official statistics reflects international financing structures rather than borrowing by businesses active in the Cypriot economy.
3. Sweden — 108.6% of GDP
Sweden is one of the few countries near the top of the ranking where the debt mainly reflects borrowing by domestic companies.
Much of it is concentrated in commercial property.
Swedish real estate companies borrowed heavily during the years of exceptionally low interest rates, financing themselves through both banks and bond markets.
When interest rates rose sharply after 2022, the sector became one of the country’s main financial vulnerabilities.
2. Denmark — 115.4% of GDP
Denmark’s high level of company debt is also largely genuine.
The country’s biggest international companies, including Novo Nordisk, DSV, Carlsberg and Ørsted, have increasingly turned to international bond markets to finance their expansion.
According to Danmarks Nationalbank, corporate bond borrowing has tripled in the past five years.
Most of the debt is held by foreign investors and is often issued through subsidiaries based outside Denmark, reflecting the global nature of Danish businesses.
1. Luxembourg — 251.1% of GDP
Luxembourg stands in a category of its own.
Company debt amounts to more than two and a half times the country’s annual economic output, by far the highest ratio in the European Union.
Yet the country’s own central bank says the figure is easily misunderstood.
Luxembourg hosts thousands of foreign-owned holding and financing companies whose debt is largely matched by financial assets.
Rather than indicating excessive borrowing by domestic businesses, the figure reflects Luxembourg’s role as one of the world’s leading centres for international corporate finance.
Despite having the highest public debt burdens in the European Union—146% of GDP in Greece and 137% in Italy at the end of 2025—their corporate sectors remain among the least indebted in the eurozone.
Corporate debt stood at 58.6% of GDP in Greece and 55.1% in Italy, both well below the EU average.
In both countries, debt is primarily concentrated in the public sector rather than among private companies.
Four of the five countries at the top of the ranking—Luxembourg, the Netherlands, Cyprus and Belgium—are relatively small economies.
This is largely explained by their role as international financial hubs.
These countries host thousands of holding companies and financing vehicles used by multinational corporations to manage investments and internal funding across borders.
Although these entities often have limited economic activity in the host country, they are classified as non-financial corporations in official statistics.
An important methodological detail also contributes to the high figures.
Eurostat excludes lending between companies located in the same country, but financing between companies within the same multinational group remains included when it crosses national borders.
In international financial centres, these cross-border intra-group flows account for a significant share of recorded corporate debt, inflating the headline ratios.
This explains why central banks in countries such as Belgium and Luxembourg publish alternative measures that remove these financing structures and show substantially lower levels of domestic corporate indebtedness.
At first glance, the data suggest that Europe’s most indebted companies are concentrated in Luxembourg, Cyprus and the Netherlands.
In reality, the figures reveal as much about where multinational corporations choose to organise their finances as they do about borrowing by domestic businesses.
Once the effect of international financing centres is stripped out, the picture changes considerably.
France emerges as the notable outlier: the only major European economy combining both high public debt and genuinely elevated corporate indebtedness.
Unlike several of the smaller countries at the top of the ranking, France’s own central bank considers corporate leverage to represent a real macro-financial vulnerability rather than simply a statistical distortion.
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