Social protection expenditure in 2006 within European Union 27 Member states accounted for 26.9% of GDP. This ratio was 27.1% in 2005 and 2004 and 27.2% in 2003. The data delivered by Eurostat last report show important disparities between Member states, which reflect important differences in terms of living standards.

According to the last data released by the Statistical Office of the European Communities, Eurostat, the EU27 average continued to mask major disparities between Member States. Social protection expenditure as a percentage of GDP was above 30% in 2006 in France (31.1%), Sweden (30.7%) and Belgium (30.1%), and below 15% in Latvia (12.2%), Estonia (12.4%), Lithuania (13.2%) and Romania (14.0%).

In terms of social protection expenditure per capita in PPS 4 (Purchasing Power Standards), which eliminates price level differences between countries, the available data for the same period, 2006, showed figures ten times higher in Luxembourg than in Romania . After Luxembourg , the highest spending in PPS per capita was recorded in the Netherlands and Sweden at over 40% above the EU27 average and the lowest in Romania and Bulgaria (both at 20% of the EU27 average).

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. Although this report is referred to last available data which are for year 2006, social protection and the need to monitor social impacts of current economic downturn were already at stake on the proposal for a joint report on social protection put forward by the Commission on February 2009.

Social protection expenditure and funding

In the EU27 in 2006, expenditure on old age and survivors benefits accounted for 46% of total spending on social protection benefits, sickness & health care benefits for 29%, disability benefits and family & children benefits for 8% each, unemployment benefits for 6% and housing & social exclusion benefits for 4%.

Share of social contributions in funding ranges from 31% in Denmark to 80% in Estonia and the Czech Republic

In 2006, the two main sources of funding of social protection at EU27 level were general government contributions from taxes, making up 38% of total receipts, and social contributions 59%. These contributions are divided into those paid by the persons protected i.e. employees, self-employed persons and pensioners (21% of total receipts) and those paid by the employers (38%).

More than 80% of total receipts came from social contributions in Estonia and the Czech Republic , while more than 50% of total receipts were made up of taxes in Denmark (63%), Ireland (53%) and the United Kingdom (50%).