Slowing Economic Growth and Falling Production in EU

Abstract

The author examines the problems of economic growth of the EU in the period before the coronavirus pandemic, as well as during the 2020 economic crisis and gradual recovery. It is argued that the decrease in 2017‒2019 was caused by a number of long-term reasons, i.e. slow technological renewal of production base and narrowing of trade surplus due to loss of competitive advantages over producers from Southeast Asia. The author analyses the mechanics of pandemic’s impact on EU production volume, caused by decline in general demand and supply of goods and services. The EU economic policy is viewed as an appropriate instrument to protect citizens and companies from bankruptcy. It is outlined that the recovery will stem not from the economic policy, but from countering the pandemic with vaccines and sanitary restrictions. The author forecasts that economic growth rates in the region will slow down due to the reasons that emerged before the pandemic. Moreover, the growth will be negatively affected by the current EU policy of greater use of clean energy and technologies that preserve the environment, but inflate the production costs.