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Government spending in European countries - Statistics & Facts

General government spending offers an indication of the size of the government in European countries and highlights the diversity of the countries' approaches to providing public goods and services and delivering social protection. This indicator can be measured either in thousand U.S. dollars per capita or as a percentage of GDP. According to the International Monetary Fund, France estimated the highest public spending ratio among member states of the European Union in 2016, amounting to about 56.5 percent of the GDP.

General government expenditures include two different categories of goods and services: goods for collective consumption (defense, justice, etc.), which are usually known as public goods and services, and expenditures for individual consumption, such as health care, housing, education, etc.

Defense, public order and safety spending all aim at raising and maintaining armed forces or other methods essential for defense purposes, including policing and crime prevention. In Italy, the expenditure on defense peaked in 2008 and decreased slightly over the following years, amounting to 13.2 billion euros in 2017. The same decreasing trend can be observed in France, where the public sector expenditure on defense decreased from almost 48 billion euros in 2008 to around 40 billion euros in 2014. Conversely, the spending on public order and safety in the Netherlands increased over the years, reaching its peak in 2016. However, the Netherlands only ranked fifth in general government expenditure of public order and safety services among EU countries in 2014. The United Kingdom had the greatest expenditure on such services, followed by Germany and France.

Justice is another service of collective consumption, which falls into the first category of general government expenditures. In 2016, the French government decided to spend roughly 8.1 million euros for justice. Taking into account the public sector expenditure on law courts in the United Kingdom, it generally decreased over the last years, falling to approximately 5.7 billion British pounds in 2016/17.

Public expenditures for individual consumption involve some of the most important functions of government expenditure, such as social protection expenditure; this includes, among others, social services for sickness and disability, old age, families and children, unemployment, income support and tax credits. Taking the United Kingdom as an example, the largest share of public sector expenditure on services in 2016/2017 was spent on social protection. In Finland, the total expenditure on social protection over a nine year period increased by almost 20 billion euros.

Health is another important function in terms of government expenditure, followed by education. In 2013, the Netherlands ranked first for public and private healthcare spending as a share of GDP among European countries. Germany and France followed. In 2016, total health expenditure in the Netherlands reached approximately 14 percent of total GDP. Public expenditure on education also increased over the last years. Estimates on education spending in the European Union saw an increase from 2003 to 2013 by over 100 billion PPP (Purchasing Power Standard). The example of Finland can confirm this upward trend: expenditure on education over the last twenty years increased by 1,000 euros per person.


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