Ten years after the crash: scientists are waiting for the upturn

In the decade since the financial crash, governments of the 19 countries in the euro currency union have been pursuing an austerity agenda that has seen taxes go up, and public sector spending from pensions to social services, and education to research funding, go down.

Ten years on, the economic picture for the currency union is finally starting to look brighter, with growth and employment picking up.

Yet in Greece, Italy, Portugal and Spain, the euro zone countries that confronted the worst of the crisis, austerity is far from over. Science|Business spoke to a scientist from each of these countries to assess the current state of play and the prospects for recovery of the science base.  

The pain in Spain

In Spain the economy has returned to its pre-crisis size, according to government data released earlier this month.

However, any sense of revival is not palpable in the lab. Some 12,200 R&D jobs disappeared between 2010-2015, according to the latest numbers from the National Institute of Statistics. In the Spanish National Research Council alone about 4,000 jobs were axed over the same period. And these figures do not capture the number of researchers shunted into short-term contracts.

“There has been a tremendous loss for science in Spain,” said Amaya Moro-Martín, a Spanish astrophysicist who works in the US at the Space Telescope Science Institute in Baltimore. “It is going to be very difficult to recover [from] this, because the brain drain in many cases is not reversible, and it takes basically a decade to train researchers.”

As yet, the recovery is shaky and Spain remains the euro zone’s second-worst jobs generator, after Greece. Moro-Martín does not see the government being ready to pump more investment into science. “I wouldn’t bet on it happening anytime soon,” she said.

A similar glum outlook prevails in Italy. “No one is discussing an increase in the science budget,” says Francesco Sylos Labini, a physicist at the Enrico Fermi Centre in Rome.

In the third-largest economy in the euro zone, Labini sees “inertia” in the government’s science thinking.

“The average rate of brain drain is 20 per cent and I don’t feel optimistic about our government doing anything about this. Physics, biology and the humanities have lost so much ground already, and are still under-funded fields,” Labini said. “Italy also has one of the lowest rates of private sector R&D investment in Europe so without a push from the government, nothing will happen.”

Science stasis

For all the privation set in train by burst bubbles and recession, European governments never completely abandoned research investment. However, stasis is etched in the numbers. The amount going to research and technology has essentially been flat since 2011 – rising in countries including the Netherlands, Germany and Austria, but declining in Spain, Italy, France and Ireland.

Evolution of R&D spend in EU, China, South Korea and US. Source: European Commission

Portuguese uptick

Budget cuts have given way to fresh spending and pay increases in Portugal, which has reversed austerity measures in the past two years. But, says Nuno Nunes, professor of human-computer interaction at the Technical University of Lisbon, “The R&D situation is still far from ideal.”

The relatively cheap cost of living in Lisbon and Porto is attracting entrepreneurs to decamp to the country, but overall, investment in research continues to slide. “Portugal peaked at 1.6 per cent of GDP in research back in 2008 and since then it dropped steadily to 1.24 per cent,” Nunes says.

It is ironic then, that Carlos Moedas, who managed the Portuguese bailout and related programme of cuts, now finds himself - as EU research Commissioner – as cheerleader for the Lisbon target of getting member states to spend 3 per cent of GDP on research.

In 2015, voters in Portugal opted for an alliance of left-wing parties to take over from the right-wing government that steered the country through its punishing bailout.

The new government has won praise for easing austerity, but a full revival is still some way off. “The situation is improving although we are still missing clear concrete signs of change,” says Nunes.

No return to normalcy in Greece

Meanwhile, the few tentative flashes of recovery in Greece, which has submitted to wrenching cuts as a condition of successive bailouts by European authorities, are similarly met with suspicion.

Figures from the National Hellenic Research Foundation point to a recent 14 per cent boost in R&D investment. “The data is improving, but we have not seen the impact yet,” says Daphne Kyriaki-Manessi, a professor in the Department of library science and information systems at the Technological Educational Institute of Athens.

There is no sign yet of a recovery for research in the country that suffered most from the 2008 meltdown. “My university is still understaffed. Retired researchers are not being replaced and brain drain is not slowing down at all,” Kyriaki-Manessi says.

Taxes are a massive discouragement to new investment, she believes. “In many ways, I feel I am working just to pay taxes. I came back to Greece from Canada with a sense of optimism in 1995 and now I’m sort of regretting it.”

Move some levers; stop sending Brussels money

The European Commission estimates that achieving the aspirational Lisbon target of spending 3 per cent of GDP on research would require an extra investment of €150 billion per year across the whole bloc. 

For there to be any chance of this happening, policies have to change, Labini says. The EU maintains rules limiting budget deficits, which Labini argues should be relaxed, and an EU R&D tax credit introduced

In fact, the Commission did call for a Europe-wide R&D tax break last October, although this does not appear to have gained any real traction with EU governments.

Labini and Moro-Martín also make a quieter challenge to the amount their countries contribute to EU R&D.

“Not a lot of people are talking about this but, quite simply, there is a lot of money going to EU programmes which is not returning,” said Moro-Martín.

Money flowing to Europe’s premier science funding agency, the European Research Council, “Is not good business for countries like Spain or Italy,” Moro-Martín said. “Even if our researchers do win an ERC grant, often times they will take it abroad to another institution. The rich countries are getting richer at our expense, which is very hard to justify at the moment.”