Report Assesses the Recession's Toll on Higher Education in Europe

May 25, 2010

A new report by the European University Association examines the effects of the global financial crisis on European universities over the past two years and concludes that, while the situation is far from uniform, the turmoil has had profound implications for higher-education systems across Europe.

The majority of European universities rely on public financing for the bulk of their income, and cuts in government spending are taking a heavy toll in many countries, says the report, "Impact of the Economic Crisis on European Universities."

At the beginning of the economic crisis, in 2008, "it looked like higher-education budgets would not be drastically affected," Thomas Estermann, the report's author, said on Tuesday. But those expectations have proved wrong, he said, and "more and more countries are resorting to cuts in public funding going to higher education and research."

Mr. Estermann is the head of the unit for governance, autonomy, and funding at the European University Association, and the report is part of the association's project on European Universities Diversifying Income Streams.

The report singles out Latvia, which has come under pressure from the International Monetary Fund and the World Bank "to reduce drastically public funding of higher education," for some of the most severe measures. An initial cut of 48 percent in higher-education spending at the beginning of last year was followed by 18 percent in additional cuts this year.

Britain, Estonia, Ireland, Italy, Lithuania, and Romania are cited for imposing what the report calls "heavy cuts" ranging from 5 to 10 percent. Cuts of up to 5 percent have been seen in many countries in Eastern and Southeastern Europe, including Croatia, the Czech Republic, Macedonia, Poland, and Serbia.

In addition to outright budget cuts, several countries have abandoned previously announced intentions to increase higher-education spending. "In Hungary, for example, the government has canceled plans announced in 2007 to increase overall university funding, leaving universities with 15 percent less financial support than previously expected," the report says.

France and Germany, continental Europe's dominant economies, are notable exceptions. Both countries have announced major new commitments to higher education and research, although Mr. Estermann emphasized that they represent two very different scenarios. In Germany's federal system, higher education is more the preserve of the 16 states than the national government. The states are facing a "diverse" economic picture, but the federal government has increased its support of higher education and research institutions, Mr. Estermann noted. In France, the government's pledge to commit billions of euros more to higher education predated the onset of the economic crisis, and "it is one of the countries that has actually kept its promise," said Mr. Estermann. "It is more the exception than the rule."

For many higher-education systems, the extent of the impact of the crisis is still uncertain, in part because of "the delay with which cuts in public spending translate into higher-education budgets," the report says. Also, the financial landscape is still changing. Just this week, for example, the new British government announced nearly $300-million in fresh cuts for universities, on top of $1.4-billion announced late last year by the previous government.

Cuts Vary by Country

The effect of budget cuts on university systems differs from country to country, the report says. Teaching has been more affected in Britain, Estonia, and Hungary, as well as the Dutch-speaking community of Belgium, or Flanders, than in other countries. (The Flemish and Francophone communities of Belgium have separate memberships in the association and are considered individually). Some universities have introduced layoffs, while others have reduced the number of courses and programs they offer, or even curtailed research output.

In Latvia, universities have cut salaries, imposed hiring freezes, and reduced student services and programs such as sports.

The measures cash-strapped university systems are implementing "represent a major concern for maintaining the high quality of higher education," the report says, and universities are keenly aware of the difficulties.

"What we see in working with our member institutions,"Mr. Estermann said, "is that they are trying to keep up quality—that's the main aim of all the institutions."

European universities have come to realize that they cannot afford to rely financially on governments to the extent they have in the past, he said.

"A lot of institutions across Europe are looking actively to diversify their funding, through collaborations with business and industry, research collaborations, philanthropic funding, or even using their facilities to create income," Mr. Estermann said. "What is very clear," though, he added, is that universities "will never be able to replace immediately the large budget cuts that have been introduced in public funding."