European debt reaches record $95 trillion

According to the Institute of International Finance (IIF) Global Debt Monitor, the total debt of 32 European countries exceeded $95 trillion in the first half of the year, marking a new record. This total represents approximately 25% of global debt, with the debt-to-GDP ratio for the region standing at roughly 325%.

France holds the highest debt stock in Europe at $15.5 trillion, followed by the United Kingdom at $14.7 trillion, Germany at $13.5 trillion, and Italy at $7.2 trillion. Sectorally, financial institutions account for the largest share with $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.

The report highlights rising borrowing costs, particularly in France, where the 5-year Credit Default Swap (CDS) premium rose above 100 basis points, its highest level since late 2012. Italy's CDS premium reached approximately 75 basis points. The IIF warns that persistent budget deficits, political uncertainty, and a heavy reliance on international investors to finance deficits make stabilizing debt levels increasingly difficult.