percentage points to 7,1% of GDP (6,6% in euro area) and education accounted for an increase of 1,8
percentage points to 7% (5% in euro area).
Figure 2 - Composition of government expenditure, % of GDP(functional classification)Ot hersGeneral public
servicesEc. affairsEducationHealt hSocial protection010203040501990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003Note: Other functions include defence, public order and safety, environment protection,
housing and community amenities and recreation, culture and religion.5. Conclusion
After a period when social expenditures, aimed at deepening social cohesion, increased markedly, the
Portuguese public administration began generating excessive deficits. Having in mind that those deficits,
besides exceeding the limits considered in the Pact, are hindering the convergence process, the
government elected as its main aim the prosecution of a consolidation policy. Considering the magnitude
of the present deficit, the budget consolidation is being done through policy measures both from
expenditure and revenue sides. Most of the measures, albeit described and quantified in the last update of
the Stability Programme as well as in the 2006 Budget proposal, didn’t produce, yet, tangible results.
This is the case, for instance, of public administration reform, or the changes being done in the old-age
pension regime of civil servant. Besides, it seems reasonable to expect that an important part of
expenditure- driven consolidation efforts would generate significant effects upon the quality of public
finances.