Germany has the highest social spending in Europe

2025-11-25 08:16:00, Kosova & Bota CNA

Around 41% of German public spending goes to social security. According to one study, this figure is higher than in any other European country. Roughly half of this goes to social security for the elderly.

With around 41% of public spending, Germany is the country that spends more money on social security than the rest of Europe. This is based on a study by the German Institute for Economic Research (IW), which is close to employers, and was first reported by the Rheinische Post newspaper. According to the study, around half of the funds are spent on social security.

The study is published just before the budget week in the Bundestag and the important coalition negotiations on the pension package. Amid the pension dispute, the IW advises "counteracting further increases in state activity and, above all, social spending." This also applies to healthcare spending.

The EU average is 39 percent.

According to the study's authors, the Nordic countries, as well as Austria and Switzerland, spend 40% of total public spending on social security, while in the Benelux countries the figure is 38%. The EU average is 39%.

However, in terms of economic performance, the Nordic countries are still slightly ahead of Germany in terms of social spending. In terms of healthcare spending (16%), Germany leads together with the Benelux countries and the Nordic countries.

According to the IW study, spending on public administration is particularly high in Germany. During the study period, this spending increased significantly in Germany, from 7.2% to 11% of public spending. In contrast, Germany ranks last in the area of ??education, with 9.3% of total spending. According to the IW, Austria and Switzerland rank almost 50% higher.

Also behind in public investments

According to the study, Germany has lagged behind in public investment throughout the entire period under review. Currently, investment accounts for 6.2% of total spending.

For the study, IW analyzed Germany's overall spending and spending in various areas for the years 2001 to 2023. As comparable regions in Western Europe, the institute took as reference the Benelux countries, Austria and Switzerland, as well as the Nordic countries Denmark, Sweden, Norway, Finland and Iceland, which are relatively similar to Germany in terms of economic development and cultural formation./ DW