In 2018, total government expenditure in the European Union (EU) amounted to 46.7% of gross domestic product (GDP). This share has steadily decreased since 2012, when it stood at 49.7% of GDP, according to data on general government total expenditure by function issued by Eurostat, the statistical office of the European Union.
According to Eurostat ‘social protection’ was equivalent to 19.2% of GDP in 2018. The next most important areas are ‘health’ (7.0%), ‘general public services’ (6.0%) such as external affairs and public debt transactions, ‘education’ (4.6%) and ‘economic affairs’ (4.4%). The functions ‘public order and safety’ (1.7%), ‘defence’ (1.2%), ‘recreation, culture and religion’ (1.1%), ‘environmental protection’ (0.8%) and ‘housing and community amenities’ (0.6%) have more limited weights.
More specifically in Cyprus the general government total expenditure by function, 2018 as % of GDP was 43.6% in Total, and 7.0% went to General public services, 1.9% to Defence, 1.7% Public order & safety, 9.9% to the Economic affairs, 0.3% to Environmental protection, 1.5 % to Housing & community amenities, 2.7% to Health, 0.8% to Recreation culture & religion, 5.2% to Education and 12.5% to Social protection, out of which 0.5% to Sickness & disability, 6.1% to Old age, 1.4% to Survivors, 2.8% to Family & children 0.5% to Unemployment and 1.2% to Others.
In Greece, the general government total expenditure by function, 2018 as % of GDP was 47% in Total, and 8.3% went to General public services, 2.0% to Defence, 2.1% to Public order & safety, 4.4% to the Economic affairs, 1.3% to Environmental protection, 0.2% to Housing & community amenities, 5.0% to Health, 0.8% to Recreation culture & religion, 3,9% to Education and 19% to Social protection, out of which 1.5% to Sickness & disability, 13.2% to Old age, 2.0% to Survivors, 0.8% to Family & children, 0.5% to Unemployment and 1.0% to Others.
Social protection represented the most important area of general government expenditure in 2018 in all EU Member States
The ratio of government social protection expenditure to GDP varied across EU Member States from less than 10% in Ireland (9.0%) to nearly a quarter in Finland (24.1%) and France (23.9%). Five EU Member States – Finland, France, Denmark, Italy and Austria – devoted at least 20% of GDP to social protection, while Ireland, Malta, Latvia, Romania, Bulgaria and Czechia each spent 12% of GDP or less on social protection.
Social protection expenditure can be further broken down into a number of detailed groups.
The group ‘old age’, which includes pensions, accounted for 10.4% of GDP in the EU in 2018. It made up the largest part of social protection expenditure in all EU Member States, with the highest shares being registered in Finland (13.6%), followed by France and Italy (both 13.3%), Greece (13.2%) as well as Austria (12.4%). In contrast, Ireland (3.2%) recorded the lowest share, followed by Cyprus (6.1%), Lithuania (6.2%) and the Netherlands (6.4%).
With shares of at least 8% of GDP in 2018, Denmark (8.3%), Austria (8.2%) and France (8.1%) recorded the highest ratios to GDP devoted to health among EU Member States.
The highest ratios to GDP of government expenditure on general public services were observed in Greece and Hungary (both 8.3%), Finland (8.0%) and Italy (7.9%). For education, the highest shares were registered in Sweden (6.9%), Denmark (6.4%) as well as Belgium and Estonia (both 6.2%). The highest share of government expenditure on economic affairs in 2018 was recorded in Cyprus (9.9% of GDP), ahead of Hungary (7.7%), Bulgaria and Croatia (both 6.7%) as well as Belgium (6.6%).
For public order & safety, shares were highest in Bulgaria (2.5%), Croatia (2.4%) and Hungary (2.3%). In 2018, at least 2% of GDP was spent on defence in Latvia (2.1%), Estonia and Greece (both 2.0%). The highest shares of government expenditure on recreation, culture & religion were recorded in Hungary (3.2%) and Estonia (2.0%), on environmental protection in the Netherlands (1.4%), Belgium and Greece (both 1.3%), and on housing & community amenities in Croatia (1.7%) and Cyprus (1.5%).
During the first three years of the economic and financial crisis (2007-2009), government expenditure as a percentage of GDP grew in the EU.
It increased from 45.6% of GDP in 2007 to 50.6% in 2009, which was partially due to a lower GDP. Apart from an increase between the years 2011 and 2012 (from 49.1% of GDP to 49.7%), it has steadily decreased ever since, and remained stable at 46.7% of GDP between 2017 and 2018.
‘Social protection’ and ‘health’ are the only two functions whose shares in total government expenditure increased during the period from 2007 to 2018.
In the EU, social protection expenditure increased its share in total expenditure from 38.7% to 41.2%, while expenditure on health increased from 14.3% to 15.0% of total expenditure. In contrast, government expenditure on ‘public services’, for example, fell from 15.0% of total expenditure in 2007 to 12.9% in 2018.