From Crisis to Crisis: What the European Union Has Learned from Economic Crisis Management

Abstract

The European Union has never had to face economic crises of such intensity and frequency as in the past decade or more. In 2008, the financial crisis that started with the collapse of Lehman Brothers, grew into a global financial crisis, threatening the euro. From 2020, the coronavirus epidemic (Covid-19) has had serious economic consequences for the entire globe. In none of these cases was the Union the source of the problems, but its recovery has still been less robust than that of the rest of the developed world. The EU approached the two crises in two different ways. Therefore it is worth comparing why it turned to a certain method, and whether it was able to learn from its own experience and mistakes during managing the previous crisis. As a result of the 2008 financial crisis, the Union fortified the euro area with legislative measures and new institutional set-ups, however the applied austerity policies implied serious sacrifices on the front of economic growth. By the time the coronavirus reached the continent, the Union was already equipped with a stronger arsenal to counter the effects of the economic crisis. It responded faster and in a less orthodox and more innovative way. However, the burden of recovery remained largely with the Member States. Despite the positive trends in 2021, due to the many uncertainties and new challenges, we cannot see clearly when the Union will be able to leave the crisis behind and whether it will emerge stronger from it in terms of competitiveness.