The necessary next steps in Europe's education policy
Univ.-Prof. Dr. Hardy Hanappi
Ad personam Jean Monnet Chair for Political Economy of European Inegration
University of Technology of Vienna www.econ.tuwien.ac.at/hanappi/ hanappi@tuwien.ac.at

Recent crisis dynamics
Implications for Europe‘s
Education Structure
Necessary Education Policy
Central Europe:
Austria and Hungary

Welfare in the Long-run
GDP per Capita
Twelve Western European Countries
25 000
20 000
15 000
10 000
5 000
0 year

Recent global capital accumulation
Dow Jones Industrial (daily)
15000
14000
13000
12000
11000
10000
9000
8000
7000
6000 high low

Motor of welfare increases
Growth of Labour Productivity
10
4
2
0
-2
8
6
Germany
Italy
Spain
United Kingdom
France
Log. (Germany)
Log. (Spain)
-4

Divergence in Europe 1
Growth of Industrial Production
20,0%
-10,0%
-15,0%
-20,0%
-25,0%
15,0%
10,0%
5,0%
0,0%
-5,0%
France
Germany
Greece
Italy
Portugal
Spain
United Kingdom

Divergence in Europe 2
Monthly Unemployment Rates
30
25
20
15
10
5
0
France
Germany
Greece
Italy
Portugal
Spain
United Kingdom

Divergence in Europe 3
Current Acoount
10
-5
-10
5
0
-15
-20
Germany
Greece
Italy
Portugal
Spain
United Kingdom
France

Stagnating Wage Growth – Exploding Credit

Formal Education Levels in EU 27
120.000,0
100.000,0
80.000,0
60.000,0
40.000,0
20.000,0
0,0 level 6 level 5 level 4 level 3 level 2 level 1 level 0
A rather stable structure – challenges from enlargement

Source: OECD

In 2010, the average employment rate for individuals with a lower secondary qualification was 65.3% for men and 46.9% for women across EU21 countries, while the average employment rate for individuals with a tertiary-type A (largely theory-based) qualification was 88.0% for men and 81.1% for women.
In faster changing economic environments education has to provide more general capabilities.

Europe is the preferred destination for students studying outside their country, with EU21 countries in Europe hosting 41% of all international students.
Within the share of foreign students enrolled in
EU21 countries, 76% of students come from another EU21 country.
Eliminating language barriers and legal difficulties is an important next step for European education policy.

Redesign of European labour organization structure
(labour time and life time schedules including public child care etc.) is an integral part of education design.
A central fiscal authority of the EU is necessary to enable these deep structural changes.
Europe’s special capability as knowledge producer can secure its position in the global division of labor in the long-run!

Can build on a great historical tradition – but recently experience a sharp economic divergence.
Austria faces a lack of tertiary education: need for finance. And more and better young teachers.

Hungary is in a desolate economic situation and needs to overcome isolation – by opening to EU support.
Both should join a common EU vision of guaranteeing the reproduction of a sustainable welfare level – supported by a common education system

• Longer education, later retirement
• Substantial shift in government expenditure components:
Less business and agriculture subsidies, more education expenditure
• A Quantum Jump in A-H cooperation