SPAIN is emerging as one of Europe’s most economic performers, with the latest data suggesting it could soon be on a stronger footing than France and Germany.
The claim comes from a detailed analysis published by the UK’s Telegraph, which argues that Spain’s improving budget position and falling debt ratio mark a remarkable turnaround for a country that only a decade ago required a multibillion-euro rescue package during the eurozone crisis.
Spain’s budget deficit is on track to fall to 2.5% of GDP in 2025 and 2.3% in 2026, according to forecasts by the Bank of Spain. If achieved, it will mark the sixth consecutive year of deficit reduction.
Spain’s debt burden, long an albatross around its neck, is now hovering around 100% of GDP – and should drop to 97% by 2027.
More remarkably, bond markets are already lending to the Spanish government at lower rates than to France or Italy, reflecting growing confidence in Madrid’s finances.
The British broadsheet notes that Spain’s improved position has been helped by stronger than expected growth, record-breaking tourism and higher than usual tax revenues driven in part by immigration and increased formal employment.
The glowing report puts Spain on a healthy economic footing that brings the dwindling fortunes of France and Germany into even sharper perspective.
Berlin has loosened its long-standing debt brake, the Schuldenbremse, allowing up to €1tn of new borrowing over the next decade as it pivots to large-scale defence and infrastructure spending.
German advisers now expect the deficit to rise from 2.3% this year to more than 3% in 2026 and above 4% by 2027.
It would be the first time since 2008 that Germany runs a larger deficit than Spain, reversing one of the most entrenched economic hierarchies in the eurozone.
France is painting an even more difficult picture. Its debt-to-GDP ratio stands at around 116% and is forecast to climb to 120% by 2027.
Bond markets have pushed French borrowing costs above Spain’s for the first time in living memory.
The Telegraph reports open speculation in French and Italian media about whether Paris could one day require financial assistance from the IMF, something long considered unthinkable for the bloc’s second-largest economy.
Spain still faces deep structural challenges, including the EU’s highest unemployment rate at around 10%, rising housing pressures and a heavy dependence on tourism.
But on deficit and debt trends it is now outperforming Europe’s traditional engines, positioning itself as an unexpected pillar of eurozone stability.
The UK receives mention too. Britain currently pays more to borrow over 10 years than any other major advanced economy.
The Telegraph concludes that the foundations of a new economic order in Europe are starting to take shape, one in which Madrid is moving closer to the core and Paris and Berlin are being forced to defend the positions they once took for granted.
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It’s great to see Spain advancing d
o far but you only compare it with Germany and France.
Ireland, on the other hand, seems to be outpacing most of the European countries and has been for some time.Why no mention of It?