Mur fil-path tan-navigazzjoni, billi taqbeż is-site tools u s-selettur tal-lingwa


Social protection budgets in the crisis: Commission publishes new working paper

06/06/2013 Social protection budgets in the crisis: Commission publishes new working paper

The European Commission has published today a working paper reviewing developments in social protection expenditure during the crisis.

Working Paper 01/2013 focuses on spending trends following the peak of the crisis (2009), on changes in income distribution and on the impact of austerity packages.

The topics discussed relate to the March 2013 edition of the EU Employment and Social Situation Quarterly Review.

Spending trends: up, then down

Social protection expenditure significantly increased in the early phase of the crisis. This appears to have been broadly in the line with the exceptional severity of this crisis, although some over-adjustments may have occurred.

In 2010, social expenditure stabilised, which also seems to be largely in line with past trends. In 2011 and 2012, spending in real terms declined. This downward adjustment is significantly larger compared to past periods of economic under-performance. It points to a weakening of the economic automatic stabilisation function of social protection systems, with signs that they were actually pro-cyclical in 2012.

Differences across EU countries

The crisis led to very different changes in the distribution of incomes across Member States due to a combination of several factors:

  • initial declines in market incomes,
  • automatic adjustments in benefits and taxes levels sustaining households' incomes,
  • the impact of adjustments in tax-benefit systems since the beginning of the crisis.

In particular, the burden of austerity packages has been shared differently across Member States, with varying impacts on the distribution of incomes, reflecting the specific design and mix of measures taken in different EU countries.