SOGEI website background

Why has COVID-19 hit different European Union economies so differently?

All European Union countries are undergoing severe output losses as a consequence of the COVID-19 crisis, but some have been hurt more than others. In response to the crisis, EU leaders have agreed on a Recovery and Resilience Fund (RFF), which will help all EU countries, but those hit hardest will benefit most. This Policy Contribution explores why some countries have been hit economically more than others by COVID-19. Using statistical techniques described in the technical appendices, several potential explanations were examined: the severity of lockdown measures, the structure of national economies, the fiscal capacity of governments to counter the collapse in economic activity, and the quality of governance in different countries.