Nicosia, Cyprus. Cyprus recorded the highest level of non-performing loans in the European Union in 2024, highlighting a vulnerability in public sector balance sheets, according to Eurostat. The statistical agency also reported differences across EU countries in government guarantees and public corporation liabilities.
Government guarantees across the European Union
Eurostat said government guarantees are the most common form of contingent liabilities across EU countries, typically covering liabilities and, in some cases, assets of third parties.
In 2024, the Netherlands recorded the highest level of government guarantees at 31.0 per cent of GDP. Finland followed with guarantees equal to 17.0 per cent of GDP, while Italy recorded 14.6 per cent of GDP.
At the opposite end, Ireland, the Czech Republic and Bulgaria recorded government guarantees equal to or below 1 per cent of GDP.
Eurostat reported that in most EU countries the central government acts as the main guarantor, while notable levels of local government guarantees were observed in Finland, Sweden, France and Denmark.
Public corporation liabilities
Eurostat highlighted wide variation in liabilities of public corporations classified outside general government across EU countries in 2024.
Germany recorded the highest level of such liabilities at 84.4 per cent of GDP, followed by the Netherlands at 73.1 per cent, Luxembourg at 65.0 per cent and France at 61.9 per cent.
By contrast, Cyprus recorded one of the lowest levels of public corporation liabilities, amounting to 7.3 per cent of GDP.
How do Eurostat’s findings affect your view of financial risks in the European Union?