“The Brussels Diary With Yana Toom”: No Fixed Floor For Social Spending


On 7 May, the social summit of the EU was held, for which many, including myself, had high hopes. Unfortunately, the summit’s final declaration is a role call of “all the good things, against all the bad things”. EU leaders all agree that the European Pillar of Social Rights is remarkable, and that we need to combat unemployment and poverty... but Brussels may not interfere in the sovereign decisions of its member states.

Truth be told, the last paragraph of the declaration is more specific. There it is promised that the EU’s social partners, which are organisations representing the interests of employees, employers, small and medium enterprises and employees of state-owned enterprises, will develop a system of criteria to measure the social progress of a particular country.

These criteria can be different, and the most logical one is the percentage of GDP that a country spends on the social protection of its people. Estonia, by the way, looks unwell in this aspect. According to the latest European statistics (for 2019), we are at 13% and rank tenth from the bottom. In the first place (24%) were the Finns, who are apparently our fraternal people and should therefore be role models to us, but alas. The average social sector in the EU is 19.3%, which is much higher than ours.

Yet, this criterion is a little misleading: GDP per capita varies from country to country. And that makes us look even worse. As an example, in the social sphere, Ireland was placed last: it spent less than 9% of GDP in 2019 on social protection. Only that Irish GDP per capita is two and a half times greater than ours. This means that, when counted in euros, the Irish are more socially protected than Estonians.

Surprisingly, we do not have a fixed floor for social spending, but the fixed floor for military spending is something we do have. It is a different matter that very few NATO members have likewise. But Estonia is ahead of the rest of Europe in that regard. According to statistics for the same year (2019), we were the only EU country where defence spending exceeded 2% of GDP. There were no others – Greece and Latvia, which ranked second and third, accordingly, fell slightly short of 2%. Ireland spent the least on defence in the EU, but it is not a NATO member, and I note in parentheses that it does not seem to suffer because of it either.

Why we stubbornly hold on to the two percent when our contribution to NATO is barely even visible under a microscope is a mystery. Will the Alliance refuse to defend us if Estonia, like Germany, spends not two, but one percent of GDP? But for us, military spending is much like a religion. And when, like now, a reduction in Defence Forces spending is required, the commander-in-chief announces the dissolution of the military band and chaplains. And my colleague Urmas Paet is so outraged by this that he says: “We need to pull ourselves together and find another way around this. After all, the state budget should be viewed as a whole.” In other words: let us cut other expenses, and not touch defence, even the band.

All this would be funny if it were not so sad. Imagine that our politicians would advocate social spending with the same foam at the mouth as they do the 2% for defence spending. So far, these have just been daydreams; but what will happen when the EU sets its own fixed floor, the social one? Then we will have to choose!