Who holds the debt

Public debt is usually given as one number: 55% of the economy at the end of 2025, down from 114% in 2020. This story is about who is on the other side of it.

What the numbers say

At the end of 2025 the state owed €20.2 billion, on the count of the Public Debt Management Office; Eurostat's figure is €20.1 billion. More than half, €11.5 billion, was bonds: paper the state sold to investors, promising to pay it back on a fixed date with interest. Cyprus sells its bonds on the international market, and about eight tenths of them are held by investors abroad.

The second block is €5.95 billion owed to the European Stability Mechanism, the euro area's rescue fund. It is what remains of the €6.3 billion the fund lent Cyprus between 2013 and 2015, when the state was shut out of the markets. Repayment began in 2025.

The rest is smaller: €1.6 billion from the European Investment Bank and other European lenders, half a billion of loans taken by local authorities and other public bodies, and €0.7 billion of small items, including the bonds sold to households.

Counted by who holds it, 88% of the debt is held abroad, 10% by banks in Cyprus and under 1% by Cypriot households.

When does it fall due?

The next few years are heavy. Between 2026 and 2028, €7.3 billion had to be repaid, with €2.6 billion in 2028 alone. The rescue loan is the reason: it comes back in instalments of about €1 billion a year until 2031.

What it means for you

The debt is about €20,000 for every resident. What you pay for it each year is the interest: €417 million in 2025, about €420 a person, or 1.1% of the economy. In 2014 the interest bill was €579 million and 3.3% of the economy.

It is cheap partly because much of it was borrowed when interest rates were near zero, and partly because the rescue loan carries a low rate. The average rate on the whole debt was 1.83% in 2025. New borrowing costs more: the ten-year bond sold in January 2026 pays about 3.3%. As old bonds are repaid and replaced, the average will rise, unless the debt itself keeps shrinking.

In 2025 it was still shrinking. The state sold no bond on the markets in 2025 and repaid what fell due from its surplus and its cash. That cash reserve fell from €2.7 billion to €2.0 billion over the year, a little less than the €2.3 billion due in 2026.

What people argue

Is the debt as low as it looks? The €20 billion leaves out what the state owes to its own social insurance funds. Their surpluses are deposited with the Treasury, which spends them. At the end of 2025 those deposits came to €13.2 billion, up from €11.9 billion a year earlier, and the state paid €295 million of interest on them, across all five accounts, according to the budget's outturn for 2025. European rules net this out, because both sides are part of government, and the debt office describes it as "simply a statistical and accounting methodology". The Labour Minister himself has called it borrowing, of the order of €12 billion. Both descriptions are accurate: it is not owed to anyone outside the state, and it will have to be found when the funds need it. Two pots, not one explains the fund.

Pay it down or spend? The government's forecasts have the debt below 50% of the economy in 2026 and falling towards 40% by 2028. Its case is the memory of 2013 and the reward since: the rating agencies rated Cyprus as junk from 2012, three of them until 2018 and Moody's until 2023, and since March 2025 all four have placed it in the A category, which lowers the cost of every future loan. The case on the other side is that a state with surpluses and cheap debt could afford to pay it down more slowly and spend more now.

Does it matter that it is held abroad? Interest paid to foreign investors leaves the economy, where interest paid to local savers would not. On the other hand, a small country that relies on its own banks to buy its bonds ties their fate to the state's.

How we know

The breakdown by lender, the repayment schedule, the average interest rate and the cash reserve are from the Annual Report 2025 of the Public Debt Management Office and its quarterly bulletins. The office's total for the end of 2025, €20,178 million, is preliminary and about €100 million above Eurostat's figure for the same date; the shares by lender use the office's total, and the shares by holder, such as the 88% held abroad, use Eurostat's. The forecasts for the debt ratio are the Ministry of Finance's, from two documents a year apart.

The share held abroad and the interest bill are from Eurostat. The deposits of the Social Security Fund are from the debt office's report, citing the Treasury; the figure of €13.2 billion covers five accounts, of which the Social Insurance Fund proper is €11.3 billion. The interest paid on them is from the 2027 budget bill. The rating history is from the debt office's tables of rating actions in its Annual Reports for 2024 and 2025 and its ratings sheet of 25 August 2026.

The repayment chart shows the schedule as it stood on 31 December 2025. Since then the state has repaid the €2 billion due in the first half of 2026 and sold a new €1 billion bond that falls due in 2036. The current rate paid on the funds' deposits is not published. A 2020 actuarial report gives the formula as the European Central Bank's lending rate less a quarter of a point; press reports give 2.15%, and the amounts imply about 2.4% for 2025.

Small items include €258 million that the statistics attribute to Cyprus for loans made by the euro area's first rescue fund to other countries. It is an accounting entry, not money Cyprus borrowed.