The European Economic Transition before, during, and after the Pandemic through the War in Ukraine
Paolo Maranzano (Department of Economics, Management and Statistics, DEMS, University of Milano-Bicocca and Fondazione Eni Enrico Mattei); Roberto Romano (Associazione Economia e Sostenibilità – Està)
Inflation 2021–2022, Ukraine war, COVID-19 pandemic, macroeconomic effects, european Union
Routledge Taylor & Francis Group
Forum for Social Economics
In this paper, we employ a qualitative and quantitative analysis of European Union (EU) economic policies that were implemented to navigate the shocks generated by the 2020 COVID-19 pandemic and the 2021–2022 inflationary crisis. We conduct a country-by-country analysis of Italy, France, Germany, Spain, and the Eurozone to investigate the macroeconomic and structural effects of the pandemic and inflation. Comparing the financial and economic crises of the 2007–2009 period and the two crises of 2020–2022, we demonstrate that EU institutions have altered approaches toward managing socioeconomic shocks and crises. Specifically, we observe rapid and collaborative fiscal policy responses that kept investment and labor markets resilient. In particular, sustaining investment investments through public spending has made it possible to contain the losses generated by the pandemic. Moreover, we show that the inflationary crisis began well before the Russia-Ukraine war and that its origins are related to the techno-economic transition induced by the commodities race and the excessively long international value chains. However, the absence of a common European public economic policy based on a common public budget may exacerbate the structural challenges that the EU must address; in particular, the green and digital transition and global geopolitical rearrangements. The sustainability of the EU is linked to the choice of whether to become a lead global player with a cohesive economic and fiscal structure or to privilege internal individualism and become increasingly less incisive.