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France is among EU's biggest public spenders

Joshua Melvin · 24 Jul 2014, 17:00

Published: 24 Jul 2014 17:00 GMT+02:00

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Government spending in France amounted to 54 percent of the country’s total wealth in 2012, which puts it well above the European average and ranks it third among the freest spenders on the continent, behind Denmark and Finland.

Observers might shrug and point to France’s excellent healthcare, retirement and social welfare system when explaining it. However, France's spending is not necessarily translating into better services.

In fact in some cases it is getting a lot less in return for its money than some of its neighbors, according to a study from France Strategie, which is linked to Prime Minister Manuel Valls’s office.

“According to several studies, there is room to improve efficiency in our healthcare system (lack of outpatient care) and our overconsumption of medicines,” the report said. “Health spending would also be more efficient if there was better coordination between actors.”

To start, France’s generous spending on education, retirement and healthcare explain why it is above the European expense average of 47 percent of Gross Domestic Product, as well the outlays of Germany (42 percent) and the United Kingdom (about 45 percent).

On the other hand Denmark and Finland shelled out 58 percent and 55 percent of their GDPs respectively, making them the top spenders in the EU in 2012. Unfortunately for France’s taxpayers looser spending hasn’t necessarily translated into equivalently better services.

Though France spent more than any other European Union nations on pensions, neighboring countries like Luxembourg, the Netherlands and Sweden were as good or better than France in terms of the adequacy of payments, the report said. Though the quality of its retirement fund was just a few points better than France, the Netherlands was spending nearly half what France was.

Up next, the French school system, particularly its secondary levels, suffered from a similar lack of bang for its euro. It was the third biggest spending, yet the quality of teaching its students were getting was in the bottom half of the EU’s core 15 nations.

France, which only beat Italy, Spain, Greece and Portugal, has suffered recently from a crisis within its national education system. Teacher suicides and battles over the school calendar have added to the anxieties of French parents and prompted calls for reform.

Finally France’s health system, which is among the best in Europe, also cost taxpayers more than in most EU countries. Sweden and Finland both had more effective systems, at a lower price than France, the table found.

It’s worth noting that France came in at number six in terms of quality behind countries like Denmark, the Netherlands and Luxembourg, which have significantly smaller populations.

Though the UK was not far behind France in cost (7.9 percent of GDP versus about 8.3 percent respectively), the Gallic care was considered nearly three times better.

If most of the areas seem as though they have been in the headlines lately, it’s because they have. The government has announced cuts or freezes in many of these areas and more are expected.

Story continues below…

It’s part of President François Hollande “Responsibility pact” which aims to cut €50 billion from France’s expenses over the next three years, which would allow the country to reduce taxes on companies.

Those companies are then supposed to create some 500,000 jobs, which would hopefully mean more opportunities for the record 3.38 million unemployed people in France. The government has already warned, though, the coming cuts could hurt.

Joshua Melvin (joshua.melvin@thelocal.com)

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