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The European University Association (EUA), as the representative of European universities to supranational education and political bodies, has been closely monitoring the impact of the financial crisis on its membership since the start of the economic turmoil in 2008. The findings of this monitoring activity, conducted in consultation with the national rectors’ conferences, individual universities and national governments, have recently been made public.
The EUA report gives a good overview of the impact of the crisis on universities’ public funding, the most important source of income for most European higher education institutions, and to a lesser extent on private sources of financing. The findings show that the economic downturn has affected the European systems of higher education to various degrees and at different moments in time, reflecting in most cases the overall impact of the crisis on each country’s economy. Furthermore, different countries have reacted to the crisis in a variety of ways. While many countries were forced to drastically cut public spending and thus reduce education and research budgets (the ‘champion’ being Latvia with an initial cut of 48% of the education budget for 2009, followed by a subsequent cut of 18% the next year), others have felt no direct impact on funding so far (as seen mainly in the Nordic countries). In contrast, countries like Germany and France responded with stimulus packages to support the financial sustainability of their national HEIs.
Whether this approach is sustainable à la longue remains to be seen—the report “warns” that the negative effects are likely to become visible in the long than rather than the short run, a hypothesis that recent developments seem to support. For example, despite the pre-crisis fervour and desire to invest in education (see ACA Newsletter – Education Europe, June 2010), many of the German Länder are now experiencing financial troubles too great to act on these aspirations. Outside the continent, the UK is going through a rough time as well; after a serious round of budget cuts implemented earlier this year, the new British government hinted at yet another austerity measure—a 25 percent decrease of university and college teaching budgets—which might become a reality during the autumn. All these affect the nature of higher education and research funding of universities and the development of institutional autonomy, the EUA concludes.