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France tops global table for welfare spending

Sophie Inge · 26 Jul 2013, 11:19

Published: 26 Jul 2013 11:19 GMT+02:00

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France spends 33 percent of its gross domestic product on welfare spending, a new study from the Organization for Economic Co-operation and Development (OECD) revealed this week. That figure represents more than any other OECD country.

"With the recent crisis that started in 2007/08, social spending increased to 22 percent of GDP on average across the OECD in 2009 and it has not gone down since," read the report, published on Thursday.

The OECD said the rise in spending was down to two factors: the government’s need to address the greater need for social support, such as unemployment, pensions or housing benefit and gross domestic product growing slowly or even declining. 

 In 2009, France spent the highest proportion - a total of 32.1 percent - of its gross domestic product on welfare payments. This was followed by Denmark at 30.2 percent and Sweden at 29.8 percent. The European average was 22.1 percent.

In its predictions for 2013, the OECD still places France ahead of other countries in social spending with 33 percent of gross domestic product. The country is closely followed by Denmark at 30.8 percent, Belgium at 30.7 percent and an average of 21.9 percent in OECD countries. 

Christophe Blot from the French Economic Observatory said the reason France continued to spend so much was down do the burden on the state of the public pensions system.

And with the population ageing, pension and health spending is only likely to increase in years ahead," the OECD says.

The predicted continued rise in social spending is in spite of Prime Minister Jean-Ayrault’s confirmation in June that government spending would be cut in 2014 for the first time since 1958.

"Every year since 1958, since the beginning of the Fifth Republic, state spending has increased," Ayrault was quoted by AFP as saying.

He spoke as he sent his ministries spending caps that will result in a cut of about €1.5 billion ($2.0) in central government spending in 2014 from the 2013 level.

"This is the first time that we will propose to Parliament such a reduction. It is a structural effort," he added.

And earlier this year plans were announced to reform the family allowance system which would see the country's richer families lose their benefits.

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However Blot believes France is unlikely to see the kind of cuts implemented in the UK and Germany in recent years, despite pressure from Europe.

"I don't think it will be so drastic," Blot told The Local. "The changes to family allowances was a step in that direction, but I don't think France will go as far down that road as the UK or Germany did.

"If we had a right wing government in power, maybe it would be a bit clearer but with the Socialist government things are more uncertain."

Sophie Inge (sophie.inge@thelocal.com)

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