This is how EU governments spend their money – and why it matters

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Victoria Masterson, Senior Writer, Formative Content

  • Eurostat has created a visualization tool to show and compare government spending in the European Union.
  • Users can see what percentage of a country’s GDP is being spent on areas like health and education.
  • How governments spend their money attracts extra scrutiny in times of crisis.

When you pay taxes, where does it go? And how is it split between health, education and other areas?

To help answer questions like these, Eurostat, the statistical office of the European Union, has created an interactive visualization tool.

It allows users to see and compare ‘Government expenditure by function‘ in their country and others as a percentage of Gross Domestic Product – the total value of products and services produced in a country.

Infographic showing government expenditure by function for the European Union in 2020.
Government spending by function for the European Union in 2020, as a percentage of GDP. Image: Eurostat

Government spending by numbers

For example, what proportion of spending is on health, education, defence or environmental protection? Other spending areas include social protection, economic affairs, general public services and recreation, culture and religion.

Clicking through each of these headline functions creates a more detailed picture. Social protection, for example, shows the spending breakdown for component parts of this budget, such as old age, sickness and disability, unemployment and housing.

Infographic showing EU health expenditure.
A breakdown of EU spending on health. Image: Eurostat

Comparing spending by country

Country data can be compared with other EU countries or the EU as a whole. The EU has 27 member states, including France, Germany, Greece, Ireland, Romania and Sweden.

Government spending can also be compared with countries in the European Free Trade Association, which consists of Iceland, Liechtenstein, Norway and Switzerland.

Why government spending matters

Government spending can have a huge impact on economies, especially in a crisis. For example, to fight COVID-19, governments massively increased their spending in areas such as healthcare and employment support.

France, for example, committed more than $110 billion (€100 billion) to COVID-19 support programmes. In the United States, the government committed more than $5 trillion – about a quarter of the country’s GDP – to pandemic support programmes, according to Moody’s Analytics.

Now governments are reviewing their spending again to respond to soaring inflation and the impact of Russia’s invasion of Ukraine.

Germany, for example, has pledged to increase defence spending by $110 billion (€100 billion). This is equivalent to around 2% of the country’s GDP.

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