Germany still paying for crisis fallout

The Local Germany
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Germany still paying for crisis fallout
Photo: DPA

Social spending in Germany remains well above pre-financial crisis levels in 2007, although it has fallen back from the peak attained at the depths of the credit crunch.


With 25.8 percent of GDP dedicated to social spending, Germany is well above the average of 21.6 percent across the club of advanced economies in the Organization for Economic Co-operation and Development (OECD).

That's almost a full percentage point more spent on old age, incapacity, health, family, labour, unemployment, housing and other programmes than was spent in 2007.

German social spending peaked in 2009, when it reached 27.6 percent of GDP.

While the country might congratulate itself as it approaches a balanced budget in 2015 – one of the central aims of successive governments under Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble – it is still high on the OECD table.

Topping the list is France with almost 32 percent of GDP spent on social programmes, and the top 10 includes countries like Italy and Spain whose economic woes have become familiar from financial news.

But the list also includes theoretically stronger-performing countries like Austria, Denmark and Germany in the top 10, with Germany slotting in at number nine between Spain and Portugal.

At 10.6 percent of GDP pensions were the largest item in German social spending – well behind front runners Italy at 15.8 or Greece at 14.5, but much higher than the UK, Netherlands or Norway which all spent around 5.5 percent.

The Germans spent as much on health at 8 percent as the USA, with only France, New Zealand and Belgium spending more.

But Germany was well below the OECD average of 4.4 percent for spending on income support – in-work benefits and unemployment – at just 3.8 percent, in a table topped by Ireland at 8.3 percent.


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