TALLINN - Estonia, despite large increases in spending, still ranks at the bottom of the list of social aid when compared to other EU member states, reports ERR. At the start of the global economic crisis in 2008, Estonia’s spending on social aid rose by 25 percent. In 2008, this aid - including pensions, health, unemployment and family benefits - accounted for 2.4 billion euros of spending, forming 15 percent of Estonia’s gross domestic product.
Although the portion of expenditure for social support has grown every year, the increases in 2007 and 2008 were faster paced than usual. “In 2007, the 20 percent growth can be explained by a successful economic year and expanding budget opportunities,” said Marve Randlepp of Statistics Estonia. “In 2008, the main instigator was a surging need for support.”
Randlepp continued: “The beginning of 2008 was full of optimism and hope for further speedy growth of the economy, and that reflected in the national budget as well; however, the impact of the economic crunch that struck the country in the middle of the year, such as growing unemployment, brought along a necessity to pay more aid and benefits than before.”
Although the unemployment rate had only begun to rise in 2008, aid to the jobless more than doubled, rising by 121 percent. The number of people receiving unemployment insurance grew from 8,000 to 15,400 and those receiving unemployment sustenance - 65 euros per month to those unemployed for more than a year - from 17,800 to 23,600.
But even with increasing government aid, the comparison with other EU countries does not paint a pretty picture of Estonia. In 2008, the state spent 1,809 euros per citizen for social costs, putting Estonia in 22nd place out of 27 EU member countries. As one might presume, the end of the list is made up of Eastern European nations. Luxembourg ranks first with 16,339 euros per citizen.
At first glance, the ranking is more discouraging than it perhaps should be. The 25 percent rise in 2008 was the biggest in the EU, after Lithuania and Bulgaria. Moreover, Estonia’s aid per person stayed at a solid 23rd between 2000 and 2007. This can only add value to the recent climb, Randlepp asserted.
The biggest share of Estonia’s social support - 42 percent in 2008 - is allocated for old-age pensions. Health care is the second biggest cost at 32 percent. Family and child support makes up 12 percent.