EUROPE – EuroStat has revealed pension expenditure as a percentage of European Union members’ GDP fell to 12.5% from 12.9% in the eight years to 2001, apart from in Germany, Greece, Austria and Portugal.

Pension expenditure in the EU-15 (the data was collated before the EU’s expansion to 25 in May) was 12.5% of GDP in 2001, which was the lowest share within the eight-year period from 1993. The decreases were widespread, with the Netherlands, Luxembourg and Finland showing more than 2 percentage point falls. Greece and Portugal’s share increased by 2 and 1.8 percentage points to 13.3% and 11.4%, respectively.

Pension expenditure as a percentage of GDP is determined by economic activity and pension revaluations. Arne Kubitza, the report’s author at EuroStat, in the report said: “Changes in the share of pension expenditure to GDP could be evidence for a changing age structure of the population or an impact of pension reforms.”

In Portugal and Greece the ratio increase was because they had the fastest ageing populations in Europe (together with Spain), although their GDP increases were also above-average. Switzerland’s share of pension expenditure as a percentage of GDP went from 10.7% to 13% over the period, although this increase was due to low growth of GDP.

The highest expenditure on pension was by Italy, which spent 14.7% of GDP, although this was down from a peak of 15.3% in 1997. Italy was followed by Austria (14.2%), Greece (13.3%) and France (13.2%). Ireland allocated 3.7% of GDP to pensions, although this figure is skewed as there was no data on occupational pension schemes for private sector employees with constituted reserves, according to Kubitza.

Spain was the only other EU-15 country that spent less than 10% of GDP on pensions (9.7% in 2001, down from 10.3% in 1993), although Malta, Hungary, Norway, Slovakia and Iceland also spent less than a tenth of GDP on pensions.