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EU social-protection expenditure on rise

Published 03 November 2006 - Updated 02 November 2006
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Member states spend more each year to pay for the costs of old age, sickness, unemployment, housing and children. Large differences prevail between countries. 

According to figures just published by Eurostat, member states spent 28% of their GDP on social benefits. This means that the 25 EU countries are nearing the values of 1993, when the EU's 15 member states spent 28.7% of GDP on social benefits. 

Still, the 15 'old' member states spend on average around 10% more of their GDP on their social systems than the ten new members, when the spending is expressed as percentage of GDP. The differences are even greater when expressed in Purchasing Power Standards (PPS), which take cross-border purchasing-price differences into account. 

 

2003  

2002  

2000  

1994  

EU-25  

28,0* 

27,4 

26,9* 

 

EU-15  

28,3 

27,7 

27,2 

28,4 

SE 

33,5 

32,5 

31,0 

36,8 

FR 

30,9 

30,2 

29,3 

30,2 

DK 

30,9 

29,9 

28,9 

32,5 

DE 

30,2 

29,9 

29,3 

27,7 

BE 

29,7 

28,8 

26,8 

28,7 

AT 

29,5 

29,2 

28,3 

28,9 

NL 

28,1 

27,6 

27,4 

31,7 

FI 

26,9 

26,2 

25,3 

33,8 

UK 

26,7 

26,4 

27,0 

28,6 

IT 

26,4 

26,1 

25,2 

26,0 

EL 

26,3 

26,4 

26,3 

22,1 

SI 

24,6 

25,2 

24,9 

PT 

24,3 

23,7 

21,7 

21,3 

LU 

23,8 

22,6 

20,3 

22,9 

PL 

21,6 

21,9 

20,1 

HU 

21,4 

20,7 

19,8 

CZ 

20,1 

20,2 

19,6 

ES 

19,7 

19,6 

19,6 

22,8 

MT 

18,5 

18,0 

16,9 

SK 

18,4 

19,2 

19,5 

CY 

16,4 

IE 

16,5 

15,9 

14,1 

19,7 

LT 

13,6 

14,1 

15,8 

LV 

13,4 

13,8 

15,3 

EE 

13,4 

13,2 

14,4 

CH 

29,8 

28,7 

27,4 

25,0 

NO 

27,7 

26,2 

24,6 

27,6 

IS 

23,8 

22,2 

19,6 

18,7 

Expenditure on social protection as percentage of GDP (*excluding Cyprus)

Source: Eurostat

The figures also indicate that high spending on social welfare is not necessarily detrimental to a country's economic well-being; the EU's most competitive countries (Denmark, Finland, Ireland, Sweden and the UK) are all in the top ten in terms of GDP percentage spent on social protection. And the Baltic countries, where poverty is among the EU's highest, take the bottom position. In fact, the figures seem to indicate that investment in social cohesion is an important asset for boosting a country's competitveness. 

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