September 12, 2003 - For over a century, American colleges and universities, many originating in the 19th century as Protestant seminaries, have operated on a private, non-profit basis in the Mediterranean region. Today, they form the nucleus of the American Association of International Colleges and Universities (AAICU) and have, over the years, added an important dimension to relations between host countries and the United States.

During the Cold War, institutions such as the American University in Cairo and the American University of Beirut, as well as counterpart institutions in Greece, served as beacons to keep alive the ideas and ideals of American liberal democracy. With the collapse of the Soviet Union, new American colleges have sprung up in countries such as Armenia, Kyrgyzstan, and Bulgaria. Today's environment of terrorism and international mistrust, and difficulties encountered by foreign students traveling to the United States, have made these institutions more vital than ever to America's interactions with the world.

Within the Mediterranean region, Greece represents an interesting anomaly. Despite its traditions of classical education and Aristotle's dictum that "state education is not worthy of free citizens," the modern Greek educational system is highly centralized, with all decisions made by the Ministry of National Education and Religious Affairs. The implementation of these decisions is strictly monitored by an Athens bureaucracy, leaving little space for innovation. Probably unique in the world, the Greek constitution requires that higher education be entirely public, and Article 16 states that the "formation of universities by private individuals is forbidden."

The negative consequences of this prohibition are far-reaching at a time when the international spotlight has been increasingly on Greece with its full entry into the eurozone, completion of a successful six-month EU presidency, dismantling of the November 17 terrorist group, and campaign to showcase the 2004 Athens Olympics. Capitalizing on this enhanced profile, a major objective of the Greek government is to attract significant new foreign investment to Greece. However, a frequent complaint of potential investors has been that there is a lack of skilled professionals and workers in the country as a result of a centralized higher education system that does not allow for the development of the new fields of study necessary in today's competitive business environment.

Greek parliamentarian George Psacharopoulos, in an article in the "European Journal of Law and Economics," has quantified the vast economic and human resource costs to Greece of the resulting massive student exodus1. Greece's expenditure per university student is half that of the other 29 countries in the Organization for Economic Cooperation and Development (OECD) in constant purchasing power prices. In addition, in a global context, Greece has the highest proportion of students enrolled abroad (60,000) relative to its total population of 11 million. In terms of absolute numbers of students studying abroad, Greece ranks fourth globally, despite being the 73rd most populous nation in the world2. This year, the nearly $1 billion in fees and living expenses lost to the Greek economy as a result of the student exodus can be ill-afforded in the present tight economy or, for that matter, at any time. There is also obvious inconsistency in the contrast between the higher education sector and the elementary and secondary school sectors in Greece, in which private institutions, both non-profit and for-profit, are allowed to operate freely. As a comparative note, private, non-profit secondary schools in Greece such as Athens College, Pierce, or Anatolia are considered to be first class and competitive with those in other EU countries.

An instructive parallel within the region has been the recent flowering of world-class private, non-profit colleges and universities in neighboring Turkey. Universities such as Koc, Sabanci, Bilkent, or Yedetepe have been able to achieve high academic standards and attract excellent faculty at competitive salary rates.
If it is maintained that higher education originated in Greece during classical times, how is one to explain the 21st century phenomenon next door? First, in Turkey, there is state recognition of private, non-profit higher education, which is a prerequisite for establishing confidence in the sector and for expanding career options for graduates. Second, as does the United States, Turkey offers tax incentives to encourage philanthropic contributions to non-profit educational institutions, while Greece imposes a 10 percent tax penalty for contributions exceeding about $3,000 to these institutions.

In Greece, support for the Article 16 prohibition on private universities has centered around protectionist fear that public university employment and the privileged status of faculty in this sector would be threatened by competition from private universities. Accreditation of public universities in Greece has meant only that these institutions are government-operated and that their faculties are protected civil servants. There has been, therefore, no formal independent accreditation or quality control process in the country such as the system in the United States, where six regional accrediting bodies carry out rigorous, periodic, on-site evaluations of universities in their regions.
In countries with a balance of public and private higher education, state recognition and the appropriate tax policy create a climate of healthy competition among private entrepreneurs acting in the belief that strengthening higher education bolsters the workforce and business prospects. The interaction between public and private universities in the United States, Canada, Turkey, and elsewhere has shown that there is a natural synergy between them and that public institutions are strengthened rather than eroded by the creation of private, non-profit models.

Stunted private university development in Greece has blocked the kind of synergies for development and technology that have occurred, for example, between California's Silicon Valley and Stanford, the North Carolina Research Triangle and Duke, or the Massachusetts High Tech Corridor and MIT. The country's public institutions are unable to react with sufficient speed to private sector and technology needs.

Greece has been the subject of several lawsuits in Brussels, including one for violation of European Union laws concerning the acquisition of professional licensure because graduates of private institutions of higher education in Greece are barred from entering key professions in the country such as law, medicine, accounting, architecture, and government service.
EU education policy, which aims at standardizing higher education within the bloc, promotes mobility of students within the region and harmonization of degree programs. While some have predicted that the status of private, non-profit universities in Greece and the larger region may also be resolved through this process, policy doctrines enunciated in Maastricht, Bologna, and Prague have, by and large, been protectionist, focusing on public higher education and European university harmonization to the exclusion of both private and non-European, including American, educational institutions in Europe.
Two American universities in Greece -- the American College of Thessaloniki and the American College of Greece (Deree College) -- have received full U.S. accreditation as self-contained institutions of higher learning, while several other institutions in the country have received less comprehensive recognition as branch campuses of schools in the United States. [Editor's Note: Richard Jackson is the president of Anatolia College/The American College of Thessaloniki.] As a group, these institutions are adopting varying strategies in this confused and transitional period, including emphasis on graduate education, adult education, or study abroad programs.

As a case in point, Anatolia College, a secondary school, and its higher division, the American College of Thessaloniki (ACT), were first established as a seminary in Constantinople in 1840, secularized as Anatolia College in 1886, and relocated to Thessaloniki in 1924.
Located in a vibrant university city on the northern Aegean, ACT is a natural magnet for both Balkan and American students, of Hellenic and non-Hellenic heritage, eager to connect with modern Greece. Although it is a non-profit institution without accreditation in Greece, accreditation by the New England Association of Schools and Colleges, identical to that accorded to Harvard, MIT, or Brown, at both the undergraduate and MBA levels, allows American students enrolled in ACT to receive full course credit and permits its Greek students to transfer to American universities or study on exchange in the United States.

Ultimately, the operating environment for ACT and other private, non-profit universities in Greece will be shaped by political considerations within Greece, including national elections expected in April 2004, and developments in EU courts. No parents place a higher premium on education as the key to a child's lifetime ambitions than do the Greeks, and there is already widespread dissatisfaction in Greece with the educational system at all levels.

Over the longer run, it is likely that there will be liberalization of the educational sector and significant change that will afford Greek youth a menu of educational options consistent with the changing and competitive global, EU, and technological environments in which they will live and work. The international spotlight on Greece leading up to and during the 2004 Athens Olympics may also prove to be a catalyst in this process. Basic to any change will be a regulatory infrastructure that frees the private sector to play a role in education and provides incentives, rather than tax penalties, for Greek entrepreneurs, alumni, and parents of students to contribute to the development of private universities in the country.