Research hit as Swedes feel market pinch

Swedish universities are more than 800 million kronor (£60 million) in the red after the first six months of the year, according to the Hogskoleverket, the national agency for higher education.

The research community has been hardest hit in Lund, the country's biggest university, which had a shortfall of 315 million kronor over the six months.

"The worsening economy has started to affect our research projects," said Peter Honeth, the university director. "External funding has been cut more than we anticipated because of what's happening on the stock market."

Lund's immediate response has been to axe underfunded projects in medicine, technology and natural science to balance the books.

"Some research groups are being punished for having been successful," Mr Honeth said. "They attracted external grants in the past but the university doesn't have sufficient funds to keep them viable if those grants fall away."

He said that the Government needed to respond urgently to the call from researchers to make more state funds available. "It's vital if Swedish research is to continue to compete internationally."

Legislation scheduled to be discussed in Parliament this year may deliver the necessary funds. If not, Mr Honeth said, "the quality of research will suffer".

"The situation's better than it sounds," said Stig Forneng, a spokesman for the Hogskoleverket, "as 170 million kroner can be covered by funds that were not used last year."

Mr Honeth disagreed. "We've decided to implement stringent changes to save money at Lund-we're closing courses, not hiring new staff and looking at other ways to cut costs."