Romania currently holds the unenviable position of having the highest public debt cost within the European Union, standing at 5.2%. This financial burden comes with a significant public cost, as more than half of Romania's debt is denominated in foreign currency. According to Eurostat, this situation exposes Romania to substantial risks, particularly in the context of the domestic currency, the Leu, depreciating against foreign currencies.

The figures released by Eurostat on Monday highlight a concerning trend for Romania. The public debt cost has increased by 0.3 percentage points from 2024, signaling a growing financial strain. This increase is compounded by the fact that Romania's debt-to-GDP ratio also rose by 4.5 percentage points in 2025.

These statistics underscore the fiscal challenges facing the nation, which are exacerbated by external economic factors. In comparison to its European neighbors, Romania's debt situation appears even more precarious. Poland, for instance, has a public debt cost of 4.5%, with only 26% of its debt in foreign currency.

Germany and France, two of the EU's largest economies, have public debt costs of 1.8% and 1.9% respectively, far below Romania's rate. France's debt-to-GDP ratio stands at 115.6%, indicating a high level of debt yet managed at a lower cost. The risk associated with Romania's foreign currency debt is substantial.

As the Leu depreciates, the cost of servicing this debt rises, putting additional pressure on the country's budget. This situation is not unique to Romania, as Bulgaria also faces vulnerabilities with 75% of its public debt in foreign currency, the highest in the EU. However, Romania's larger debt cost magnifies these risks.

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Eurostat's data reveals that 12 out of the 27 EU member states exceeded the 60% debt-to-GDP threshold in 2025, with five countries surpassing the 100% mark. Greece, with a debt-to-GDP ratio of 146.1%, remains the highest, although it managed to decrease its ratio by 8 percentage points, the largest reduction among EU states. Meanwhile, Ireland boasts the lowest public debt cost in the EU at 1.4% and has successfully reduced its debt-to-GDP ratio by 5.4 percentage points.

Despite these challenges, eight EU member states achieved reductions in their debt-to-GDP ratios in 2025. This stands in contrast to countries like Lithuania and Denmark, which experienced some of the largest increases in debt costs. Denmark, for example, saw a significant rise despite having only 24% of its public debt in foreign currency.

Romania's financial predicament prompts questions about its economic strategy and the sustainability of its public finances. The reliance on foreign currency loans subjects the country to exchange rate fluctuations, which can rapidly escalate repayment costs. This issue demands urgent attention from policymakers to mitigate potential economic shocks.

The Romanian government's response to these financial challenges will be important in determining the country's economic stability. With a debt-to-GDP ratio that continues to climb, strategic fiscal management is imperative. The government must consider measures to stabilize the Leu and reduce the dependency on foreign currency debt to safeguard its economic future.

As Romania faces these hurdles, the broader European context provides a backdrop of varying fiscal strategies and outcomes. While some countries like Estonia maintain a low debt burden with a debt-to-GDP ratio of 24.1%, others like Italy and Belgium grapple with high ratios of 137.1% and 107.9% respectively. The next steps for Romania will involve careful consideration of its fiscal policies and debt management strategies.

With Eurostat's data painting a stark picture of the current situation, the Romanian government must act decisively to address these challenges. The upcoming fiscal review and potential policy adjustments will be critical in shaping Romania's economic trajectory.