The European Policy Response to the Covid-19 Pandemic

Briefing before the US House of Representatives Foreign Affairs Subcommittee on Europe, Eurasia, Energy and the Environment

July 13, 2020
Subcommittee Chairman Keating, ranking member Kinzinger, members of the Subcommittee, it is a pleasure to brief you today on the European policy response to the Covid-19 pandemic. In my written comments, which will focus on policy actions taken in the European Union (EU) and euro area, I will address two issues: The macroeconomic policy response in the EU and euro area and the important political role played by climate change and digital transition considerations in the design of the European response.

I The Macroeconomic Policy Response in the EU and Euro Area

The EU27 in early March 2020 became the first major economic region outside of China impacted by the Covid-19 virus. Early and virulent outbreaks in Italy, Spain, and France quickly spread to the rest of the EU, after which European leaders—with the noticeable exception of the Swedish government—implemented national economy-wide lockdowns in the attempt to stem the spread of the virus. Following the early confusing health policy response to the sudden pandemic, including short-lived and counter-productive national and EU-level restrictions on trade in personal protective equipment and other relevant medical supplies, comprehensive national economic lockdowns and rapid progress in testing capabilities resulted in the pandemic peaking in the EU27 excluding Sweden in early April 2020, in terms of new Covid-19 cases and deaths (figures 1 and 2).

The pandemic in the EU27 excluding Sweden declined rapidly in intensity in the following weeks and by mid- to late May 2020 reached a level low enough for most EU governments to begin a gradual reopening of their economies. The pandemic trajectory in Sweden, which did not implement a nation-wide economic lockdown but instead relied on ultimately less coercive policies in the form of strong government encouragements to maintain social distancing and other measures to reduce the spread of Covid-19, has been different from the rest of the EU. Confirmed cases and deaths per capita reached higher levels and have not yet declined to levels seen in the rest of the EU.

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Jacob Funk Kirkegaard Senior Research Staff

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