The Great Recession has had a profound impact on Government’s financing abilities. One could reasonably expect that Governments would respond to such dire economic climate by restricting their public expenses, higher education included. Yet, the extent to which the Recession has affected the size of the higher education budget and financial policies for higher education across Europe remains uncertain. How does the Great Recession affect the European Higher Education Area (EHEA)? Are member states’ responses convergent or divergent? Has the Great Recession slowed down the process of integration in the EHEA? And how does the European response compare to other regions of the world? This paper maps out the changes in the financing of higher education across Europe. It uses Soskice and Hall’s (2001) varieties of capitalism model to explain and show that responses across Europe have not necessarily been convergent, some states relying on a demand-driven stimulus while others have relied on austerity measures. This paper also provides some general comparisons with other regions of the world to derive some general considerations regarding the impact of such changes on Europe’s long-term integration potential and international competitiveness.
