Maltese govt least dependent on foreign creditors within EU

The proportion of Maltese government debt held by overseas creditors is the lowest in the EU, with Eurostat figures showing that Maltese residents’ willingness to purchase government bonds play an important part.

Just 15.2% of Malta’s debt – which stood at 42.9% of the GDP at the end of 2019, though it has since increased due to the Covid-19 pandemic – is held by non-residents, followed by Sweden (19.3%) and Denmark (25.8%).

At the other end of the scale, 80.1% of Cypriot government debt is owed to foreign creditors, followed by Lithuania (75.6%) and Latvia (74.3%).

A key reason behind Malta’s low overseas debt is due to a substantial proportion of debt – 25.6% – being held by its own residents, through government stocks and bonds. A higher rate is only observed in Hungary (27.7%), with Portugal a distant third at 14.7%. Just 0.2% of Spanish government debt is held by the country’s residents, with Slovenia (0.3%) as well as Denmark and Croatia (0.5%) achieving similar rates.

 As is the case in many other EU member states, the largest proportion of Malta’s government debt (59.2%) is held by local financial institutions. The highest reliance on local financial institutions can be found in Denmark (73.7%), Sweden (73.1%) and Croatia (66.8%); the least in Cyprus (16.2%), Latvia (22.8%) and Lithuania (23.3%).

Malta is among a significant number of EU members – all part of the euro area – whose debt is entirely held in euros. The only EU member state which is not obliged to adopt the Euro – Denmark – is the only one which has none of its debt in euros.