Where Europe spends its money: social protection and health lead
Social protection and healthcare together account for the majority of government spending across much of Europe, but shares vary widely between countries.
Tax receipts make up a large share of public income across Europe, and governments rely on them to fund services such as education, healthcare and social protection. In 2024 tax revenues in the European Union amounted to 40.3% of GDP, while total general government expenditure reached 49.6% of GDP, Eurostat figures show.
Social protection and health account for the bulk of spending
Social protection is the single largest spending category in the EU: it represented 19.6% of GDP in 2024, equal to about 40% of total government expenditure. In other words, two of every five euros spent by government in the EU go on social protection, which covers pensions, sickness and disability benefits, unemployment assistance, parental support, housing and measures against social exclusion. Pensions are the largest element, making up nearly half of social protection outlays.
The share of social protection in total government spending varies widely across 31 jurisdictions analysed (the EU plus the United Kingdom, Norway, Switzerland and Iceland), ranging from 26% in Hungary to 45.9% in Finland. Countries with social protection above the EU-average share (over 40%) include Luxembourg (42.5%), Italy (42.2%), Denmark (41.5%), France (41.5%), Austria (41.3%), Germany (41.3%), Spain (41%) and Portugal (40.4%). The OECD reports the United Kingdom’s social protection share at 34.5%.
A report by the European Central Bank, prepared by Marta Rodriguez-Vives and Linda Kezbere, underlines that there is no single "optimal level of social spending that fits all" as a share of the economy. The report also notes that "the design of pension systems differs significantly across euro area countries."
Health is the second-largest spending category on average in the EU, accounting for 15% of GDP when expressed as a share of government spending. The health share ranges from as little as 6.7% in Switzerland and 10% in Hungary to 24.3% in Ireland. The United Kingdom devotes a relatively large 19% of government expenditure to health compared with big EU economies such as France (15.6%) and Germany (15.4%).
Combined, social protection and health exceed half of government spending in two-thirds of the countries covered and together make up 55% of EU government expenditure. The EU’s "big four" economies and all five Nordic countries are above the 50% mark. Hungary (36%) and Malta (39.5%) are notable exceptions with combined shares below 40%, while Ireland and Finland exceed 59%.
Other main categories cluster around roughly 10% each in the EU: general public services (12.4%), economic affairs (10.8%) and education (9.7%). Because nominal GDP and total government outlays differ markedly between countries, the same percentage shares can represent very different absolute spending levels across Europe.
Photo: arhiva
