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Greece expenditure: More for Defense & Public Order, less for Health & Education

Greece expenditure has shown that Health and Education are not priority for the government. The country’s Defense spending is almost double the EU average. The evidence points to a policy that places greater emphasis on external and internal security, the latest study by ENA Institute for Alternative Policies has shown.

Despite the reformist rhetoric of recent years, the funding of Health and Education remains lower compared to the state expenditures intended for external and internal security.

The figures reflect a political pattern that shows that Greece places more emphasis on external and internal security and less on strengthening Health and Education.

According to the State Budget in 2024, there was another increase in appropriations for the implementation of equipment programs and overall for defense expenditures, with the projected budget of the Ministry of National Defense amounting to 6.1 billion euros. Of this amount, about 2.6 billion euros concern equipment programs.

Greece lags behind in spending on Housing (such as water supply and housing policy), Recreation and culture (such as sports and broadcasting), Health and Education.

The first conclusion of the new ENA study entitled “FINANCING BY THE GREEK STATE” is that compared to the EU average, Greece is burdened with a higher public debt and its public expenditure is more oriented towards external and internal security than health and the education.

The second conclusion is that this did not change much during the crisis. The across-the-board reduction in spending hit those that were already low (such as health and education) much harder and those that were high (such as defense and public order) less or not at all.

Regarding Health, in the pre-pandemic period, the Greek state had 10% of its expenditure on Health, compared to an average rate of 15% in OECD countries.

As a percentage of the Gross Domestic Product (GDP), public health expenditure in Greece showed a marginal increase between 2019 – 2022, remaining, however, below the OECD average (8.5%, compared to 9.5% in the other countries ).

Defense and Public Order show a systematic excess

General public services consistently exceed the EU average, which is mainly due to public debt interest, which also makes up the bulk of the category.

In the economic affairs category, Greece is generally close to the EU average with some sharp variations. In the years 2012, 2013 and 2015 the increases are due to the recapitalization of the banks, while in the years 2020 and 2021 to the extraordinary expenses for the pandemic, such as refundable advances, which are not classified as health expenses.

As can be seen in diagrams 4a and 4b, the expenditures of both categories were consistently below the EU average, less so for Health and more for Education.

Defense and Public order, are those where Greece shows a systematic excess of the EU average. In Defense, it seems that the excess is particularly large (almost twice the average) and covers the entire period. And in public order, the excess appears during the crisis period and has been maintained ever since. It seems that neither category was limited during the crisis.

The picture is completely different in the two categories of expenditure that Greece systematically lags behind, in Health and Education.

Above: Defense – Public order Below: Social protection – Environment protection

 

As can be seen in diagrams 4a and 4b, the expenditures of both categories were consistently below the EU average, less so for Health and more for Education. Spending on health was significantly reduced during the crisis and started to recover after 2015, but remained below the EU average. Spending on education fell relatively less in the crisis but did not recover afterwards.

Social protection: That is…. pensions and extraordinary payments (food-pass, fuel-pass etc)

Most of the government spending in the euro countries concerns social policy, but the mix varies by country. In Greece, out of a total of 57.4% of the GDP of government expenditures, 31.7% concerns social expenditures, of which 20.6% are pensions and benefits.

According to ELSTAT, social protection expenses for the year 2021 amounted to 48,600 million euros, showing an increase of 0.9% compared to 2020. The largest percentage of expenses concerns expenses for old age pensions, which for the year 2021 constituted 52.2% of the total social protection costs and showed a decrease of 1.0% compared to 2020.

They are followed, in descending order, by the expenditure on sickness benefits, which for the year 2021 constituted 22.2% of the total expenditure, up by 6.7% compared to 2020, and the expenditure on survivor/widow benefits, which which made up 9.9%, increased by 3.8% compared to 2020.

As the ENA Institute also emphasizes, public spending in Greece exceeds the EU average. in General public services (mainly administrative services and public debt), in Economic affairs (such as energy and transport), in Defense, Public order, Environmental protection (such as waste) and – marginally – in Social protection (pensions and benefits ).

Low expenditure on water supply and housing policy

On the other hand, Greece lags behind in spending on Housing (such as water supply and housing policy), Recreation and culture (such as sports and broadcasting),

Health and Education

The state budget foresees for 2024 appropriations for health of a total amount of 12.826 billion euros, while the corresponding provision for 2023 was 11.929 billion. Also in the regular budget of the Ministry of Health, appropriations of 5.705 million euros have been foreseen, increased by 928 .5 million Euros.

This is mainly attributed to the increased by 414 million euros, compared to estimates, grants totaling 2,594 million euros to hospitals, Primary Health Care (PHC) and the National Central Health Procurement Authority (NKAPY) for the purchase pharmaceutical and other health materials, the provision of services, the coverage of the salary of the auxiliary staff as well as for the repayment of part of the unpaid obligations of past years.

Report of the Parliament State Budget Office

The distribution of government expenditures shows, according to the Report of the State Budget Office, that Greece spends the most on Defense and is low in expenditures related to Health and Education.

The Office points out that the percentage of the population at risk of poverty or social exclusion in Greece remains significantly higher than the Eurozone average (26.3% based on the revised definition in Greece versus 21.9% in the Eurozone in 2021).

With state social spending on pensions and social benefits, the above percentage is 46.1%, an improvement over the previous year (48.2%) both for the entire population and for individual age groups.

The percentage of the population at risk of poverty or social exclusion in Greece remains significantly higher than the Eurozone average

However, without the expenditure on pensions and social benefits, the percentage becomes 18.8% (19.6% in 2021), i.e. it decreases by 27.3 percentage points, of which 4.8 are due to the payment of social benefits other than pensions and 22, 5 percentage points in pensions.

Comparing the composition of the total government expenditure of Greece with the average of the Eurozone in 2021, a differentiation in their composition is found.

Greece ranks first in defense spending (at 2.8% of GDP, 1.5 percentage points higher than the European average). Greek spending related to environmental protection (1.2% of GDP) is 0.3 percentage points higher than the European average, while Greek spending as a percentage of GDP related to health and education is below the average of the Eurozone by 1.6 and 0.6 percentage points respectively.

ENA report via in.gr

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