Amid national budget cuts for education, the EU calls on member states to boost education spending, stressing its role in resilience and growth.
As many European governments are putting pressure on education budgets, the European Commission (EC) launched a call for more targeted investments in education and training through its Union of Skills framework, presented in March this year (see SwissCore article). A recent publication by the EC takes stock of public expenditure on education across member states (MS) and highlights the importance of continued investments in the sector.
The report, which draws on Eurostat data, detects a slight upward trend in government spending on education across the EU in 2023. Importantly, this increase in expenditure marks a slight recovery after the COVID-19 pandemic, before which investments in education had already fallen steadily since 2009. Average national spending on education now stands at 9.6% of public expenditure, or 4.7% of GDP, and was still below pre-pandemic levels in 2023. The drop in spending is also attributed to increased competition for public funding, for instance, through geopolitical crises and the energy crisis. The authors suggest that new political and economic priorities by governments may compound this new composition of national budgets to the detriment of the education and training sector.
Estonia, Sweden and Latvia are among the highest spenders, with around 14% of public expenses going into education. In contrast, Italy, Greece and Romania invest the least in education, only around 8% of their public budget. A clear trend for nearly all countries is that school education (including pre-primary, primary and secondary level) is the main recipient of public spending, receiving more than 70% of education expenditure on average, compared to 16% spent on higher education. Of those expenses, staff costs, both through wages and social security contributions, accounted for the bulk of costs.
The publication makes clear that MS continue to be in the driver’s seat when it comes to investments in education systems. Despite the EU funding education through multiple sources, including the ESF+, RFF, ERDF, Erasmus+, the Just Transition Fund, and InvestEU, its combined spending of 148 billion EUR over seven years are overshadowed by the annual 806 billion EUR invested by MS. Nevertheless, the new Union of Skills framework urges MS to up their spending even further: In 2024, the Council and Parliament reformed the Union’s economic governance framework. In simple terms, MS are subject to less strict debt rules, on the condition that they commit to growth-inducing reform and investment plans. The Union of Skills text highlights that education counts as one of the strategic investment areas which permit more gradual deficit reduction and urges MS to use this new debt flexibility for more ambitious spending on education.
The report further outlines why investing in education is key for competitive and resilient societies. Studies show that higher skill levels lead to populations which recover faster from economic shocks and achieve stronger economic growth overall. On an individual level, higher skilled young people tend to be more employable, receive higher wages, and tend to participate in lifelong learning, therefore acquiring new skills and retaining their employability. Additionally, targeted investments can create more equal access to education, which is an important stepstone to reducing poverty and breaking cycles of intergenerational inequality. Considering demographic developments in Europe, the authors suggest that a declining cohort of young people may put greater demands on a shrinking workforce, while at the same time ease the strain on education systems due to smaller class sizes.
The EC’s call for MS to increase expenditure on education comes at a critical time. MS will soon be tasked to negotiate the new seven-year Multiannual Financial Framework in the Council, which will reveal their commitment to education matters on an EU level. At the same time, current geopolitical developments motivate most MS to invest larger shares of their budgets in defence. Data by the Federal Statistical Office shows that Switzerland outperformed all MS in 2022, with 17.8% of total public expenditure going to education, corresponding to 5.4% of GDP. However, in Switzerland, too, public expenditure on education has increasingly come under pressure. As governments weigh competing priorities, the coming budget decisions will be a litmus test of whether Europe truly recognises education as the strategic investment it is.