Social protection spending increasing in the EU


The 27 EU countries are spending more on social protection because of the poorly performing economy, with total expenditure having increased by around 10% between 2007 and 2010, according to new figures from Eurostat.

Benefits for families, pensions and healthcare all rose by about 10% in 2010. At the same time expenditure on unemployment increased by 33%.

In 2010 and 2011, the average unemployment rate in the 27 EU member states was 9.7%. Since then the unemployment rate has risen to 10.6%, according to Eurostat.

The two main sources of funding were social contributions (56%) and general government contributions from taxes (40%). The economic slump is entering its fifth year.

However, the data from the EU's statistical office also showed great disparities between the member states.

The countries that spent the most of GDP on social protection were France (33.8%), Denmark (33.3%) and the Netherlands (32.1%). Romania spent the least at 17.6%, closely followed by Latvia at 17.8%.

"These disparities reflect differences in living standards, but are also indicative of the diversity of national social protection systems and of the demographic, economic, social and institutional structures specific to each member state," Eurostat said.

After eliminating cost differences between countries, the social protection expenditure per capita was nearly eight times higher in Luxembourg than in Bulgaria.

After Luxembourg, the highest spending per capita was recorded in the Netherlands and Denmark at over 40% above the average of the 27 member states, followed by Austria, Ireland and Sweden at 30% above the average. Romania and Bulgaria registered the lowest pending per capita at less than 30% of the EU average.

Of the total social benefits in 2010, old age and survivors benefits accounted on average for 45%, health care benefits amounted to 37% while family benefits represented 8%.

Although healthcare benefits were the second largest social benefit in 2010, a recent report by the Commission and the Organisation for Economic Cooperation and Development found that from an annual average growth rate of 4.6% between 2000 and 2009, health spending per capita in Europe fell 0.6% in 2010, the first time it has dropped since 1975.

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