Editor's note

Besides, there are some other important requirements for the member states: they have to devote about 1,3% of GDP to education means. But less than half of EU states are up to this general requirement; all three Baltic States have to increase financing and investment (see table below).

EU’s administrative framework

The EU coordination efforts are concentrated in the Directorate General for Education and Culture (DG EAC); the general political control is led by a Commissioner, Tibor Navracsics, and a DG EAG director general, Martine Reicherts; she is to report to the European Parliament on all coordination and supporting initiatives.

The DG's education and training activities focus primarily on policy cooperation, helping countries learn from one another and work together to improve education across Europe.

The DG also manages the Erasmus + programme, which aims to improve education and training in Europe, while providing people, at any stage of their life, with learning opportunities.

Source: http://ec.europa.eu/dgs/education_culture/index_en.htm

Public expenditures: urgent problems…

On average, only 7 of 10 students in the EU member states finish their higher education programme, while half of the Union countries' completion rates are as low as 30-50%.

The report on European high education area (EHEA-2015) acknowledges that funding and knowledge of languages are considered the biggest barriers to student mobility.

Annual public expenditure on tertiary education (which includes expenditure from all levels of government) covers the funding of universities and higher education institutions, as well as all other tertiary educational institutions providing education-related services. These include entities administering education (e.g. ministries or department of education), providing ancillary services, and entities performing educational research, curriculum development and educational policy analysis. Thus, quite often EU’s financial support is used on the latter…

Annual public expenditure on tertiary education as a percentage of GDP can be used as an indicator of the country’s public financial effort in supporting its higher education system in relation to the strength of the country’s economy.

Thus, apart from expenditure on educational core goods and services (i.e. expenditures directly related to instruction and education, e.g. expenditure on teachers, university and institutions’ buildings, teaching materials, etc.), annual public expenditure also includes all expenditure on research performed at universities and other tertiary institutions and public expenditure on ancillary services (i.e. services provided by educational institutions that are peripheral to the main educational mission).

Annual public expenditure on tertiary education also includes public transfers and payments to private entities such as public subsidies to households (including scholarships and grants, public loans to students, specific public subsidies in cash or in kind for transport, medical expenses, books and other materials, etc.). However, annual public expenditure does not cover tuition fees which are direct household expenditure on education.

See: The European Higher Education Area in 2015. Bologna Process Implementation Report. In:

http://eacea.ec.europa.eu/education/eurydice/documents/thematic_reports/182EN.pdf 

The need for additional investment

Only half of the EHEA countries invest more than 1.3 % of their GDP in tertiary education. Annual public expenditure on tertiary education is the highest in Nordic countries (from 2 % of GDP in Sweden to 2.4 % of GDP in Denmark) and around 2 % in Cyprus. Annual public expenditure on tertiary education is the lowest and below 1 % of GDP in Slovakia, Croatia, Romania, Italy and Bulgaria (p. 37).

In some EHEA countries, expenditure on R&D takes up a high part of annual public expenditure on tertiary education. Such direct R&D expenditure might be funded through different modes: institutional funding and/or project-based funding and depend on the overall institutional settings of EHEA countries' research systems. In Switzerland, R&D expenditure accounts for half of the annual expenditure on tertiary education and for 0.7 % of the GDP.

Other EHEA countries such as Sweden (0.69 % of GDP), Finland (0.62 %), Estonia (0.55 %) and the Netherlands (0.52 %) also show high research intensity in the tertiary education sector. In these countries, public expenditure for educational core services and ancillary services at tertiary level are thus less than half of the annual public expenditure on tertiary education (p.38).

Table: Annual public expenditure on tertiary education

See: http://eacea.ec.europa.eu/education/eurydice/documents/thematic_reports/182EN.pdf

Commission’s program for 2016: the Baltics

According to the 2016 Commission’s annual work program (adopted in September 2015), some € 2,2 bln is allocated for the implementation of the Union’s education and training policy. The EU resources for 2016 are dispersed through all education spheres among the Baltic States in the following way: Estonia is getting about €10 mln, Latvia - € 12,8 mln and Lithuania –over € 17,6 mln. See: http://ec.europa.eu/dgs/education_culture/more_info/awp/docs/c-2015-6151.pdf

At a conference, organised by the Commission and the European Investment Bank in October 2015, Tibor Navracsics, Commissioner for Education underlined the need to reverse the alarming trend of underinvestment and finding fresh money for education in the member states. The joint event was called "Education and the Investment Plan for Europe".

Commission’s investment plan for the EU-28 states presented at the end of 2014 in the European Parliament, stressed the need for fresh investment in education as well.

However, the present situation is very worrying: the EU is lagging behind as the economic crisis hit hard the world of education over the past few years. Thus, about 123 million Europeans are at risk of social exclusion, youth unemployment is still unacceptably high in several EU states with seven millions youngsters neither working nor studying.

And inequalities continue to grow with the top 20% earning more than five times the income of the bottom 20%. Therefore, the EU-28 is now less inclusive and equal than before the economic crisis, Tibor Navracsics argued.

Education efficiency: fostering inclusion

Beyond this, there is the question of the EU’s education systems’ efficiency as the Europe's workforce is ill-prepared for the more challenging post-crisis world. Even the educational fundamentals are not secured: presently, one in five adult Europeans struggle with reading and writing and lack basic numeracy skills. Besides, one in four is unable to use a computer, write a letter or send an email…

Tackling these challenges is crucial as education is the best safety net against social exclusion. Today's early school leavers are tomorrow's unemployed and impoverished. A solid education that equips young people with the skills and competences they need for the labour market is the most efficient way to fight employment. And fighting unemployment is in turn the best means of fostering inclusion, argued Tibor Navracsics.

The EU’s efforts to maintain open and inclusive societies must be based on investment in education and developing human capital. The European Fund for Strategic Investments and the European Investment Bank offer some opportunities in boosting investment in education.

Main advantages in educational investment

The Commission has underlined three main reasons for investment in education.

First, the increasing role of private sector in investing in education; thus the European Fund for Strategic Investments’ approach is based on a brand new concept, i.e. a new way of working that goes beyond grants and loans.

This Fund can offer guarantees to help beneficiaries obtain loans from private banks at more favourable conditions. It can also invest in equity. And it can support private-public partnerships that can bring huge benefits to education in many ways: by building and modernising school buildings, by rolling out broadband, by promoting research and projects that bring together universities and companies.

Second, the European Investment Bank will remain a central player in education. Thus, for example, in 2014 EIB invested € 4.8 billion in education: supported projects ranged from universities in Italy to kindergartens in Belgium and primary schools in France. The European Investment Bank's on-going activities offer many possibilities as well as technical advice.

Finally, the EU Structural Funds are also part of the equation as they can complement schemes run under the Commission’s Investment Plan or by the European Investment Bank. This is particularly interesting for projects aimed at boosting investment in people, such as the training of teachers.

An optimal triangle

Thanks to the Commission’s dedication to progressive education, (with the efforts of Vice-President J. Katainen), the European Fund for Strategic Investment is up to running the EU “smart projects”. Thus, the member states’ creativity and good ideas will be crucial in creating much needed fresh investment in education.

There is, to my mind, an urgent necessity to arrange a “cooperative dialogue” among universities’ student councils, national academies of science (particularly, in the Baltic States) and entrepreneurship representatives, e.g. those dealing with SMEs. Such a dialogue can make a difference, while stimulating universities’ dialogue with the outside world, to create growth and innovation. 

It is good the Commission takes the role of explaining to the member states’ academic community both the new and existing instruments in exploring educational possibilities. It is the Commission, in the first place, that can examine how projects can be pooled across regions or countries so that they have a real impact on growth and jobs in the EU.

Reference: European Commission, Speech/15/5764 “Boosting investment in education: Let's make it happen”, by Tibor Navracsics, Commissioner for Education, Culture, Youth and Sport, Brussels, 5 October 2015.