Economic Union Research Articles

Neutrality in determining the fate of the Moldovan statehood

This article examines the challenges and threats faced by Moldovan diplomacy in the modern world in the context of new global changes. The author assesses and analyses the main trends in the foreign and domestic policy of the Republic of Moldova. Considerable attention is paid to the historical premise of following a neutral foreign policy course of the state. The article carried out the analysis of the fundamental doctrinal documents, resulted in a number of conclusions, which allow to make a forecast regarding the future of neutrality of Moldova and the possibility of its transformation. Today, the permanent neutrality significantly affects the foreign and security policy, becoming a factor of social and national disintegration of Moldova, as the debate about its necessity does not stop and the political elites haven’t reached a general consensus on this issue. Despite this, the policy of neutrality remains as a basic principle in foreign and security policy. Geographically, Moldova is located at the intersection of two political structures: post-soviet and european. Based on these realities, the permanent neutrality of the Republic of Moldova is considered as the best way for Moldova to maintain stability and territorial integrity. Also. the relevance of the article results from the confl ict in neighboring, demonstrating the fragility and vulnerability of neutral states in the face of modern geopolitical problems. The neutrality of the Republic of Moldova prohibits: participation in armed confl icts, deployment of any foreign armed forces on its territory and participation in any political or economic union with the aim of starting wars. The specifi city of the status of permanent neutrality of the Republic of Moldova lies in the principle of pursuing a policy of neutrality in times of peace in order to remain neutral during a possible geopolitical conflict. Accordingly, strategic adaptation to the international security environment will remain the concern of political elites of Moldova. There is an opinion among scientists and politicians that neutrality in the classical sense is no longer relevant and requires conceptual adaptation. Thus, it becomes actual and necessary to conduct a scientific study aimed at studying the manifestation of the status of permanent neutrality of Moldova under the influence of the international security system.

Oil Price Spillover Effects to the Stock Market Sentiment: The Case of Higher vs. Lower Oil Import EU Countries

The process of deepening the economic integration of European economies reached its peak with the formation of a supranational entity for conducting monetary policy. However, the high degree of financial integration of the market also implied the vulnerability of the economic union in terms of prompt reaction to external shocks with divergent effects. Oil price fluctuations are of essential importance for macroeconomic performance, which is particularly reflected in countries more dependent on the import of this raw material. This research aims to apostrophize the asymmetric effects of oil price fluctuations on the stock market indices on a sample of higher (Germany, Italy, France) vs. lower (Croatia, Bulgaria, Ireland) oil importers. The empirical findings are determined based on impulse response functions derived from the VAR model as well as the Granger causality test of the relationship between stock market indices and oil price fluctuations. In order to identify the isolated impact of oil price movements on stock market indices of selected European economies, the VAR (Vector AutoRegression) model is evaluated in the time period 2013M1-2023M1. The results of the research indicate an asymmetric mechanism of the impact of oil shocks on the financial markets of EU member states.

The presence of a latent factor in gasoline and diesel prices co-movements

This paper proposes a novel approach to identify the presence of a latent factor in the co-movements of gasoline and diesel prices in the three major European Union economies, (France, Germany, and Italy) using daily data from January 3, 2005, to June 28, 2021. More precisely, we advance an artificial neural networks algorithm estimated through a machine learning experiment through the backpropagation system to show that the neural signal is altered by an element that could coincide with a latent factor in the fuel price co-movements. We consider the role of the fuel tax systems and the connection between gasoline and diesel prices in these countries. The estimations indicate the presence of an unobservable component (the latent factor) in the fuel price co-movements, capable of influencing NN. This result validates the previous findings reported in the literature, indicating an excess co-movement in fuel prices. It also has implications in terms of fuel price forecasts in the short run.

Macro welfare effects of flexible labor contracts

We develop a Dynamic-Stochastic-General-Equilibrium model to study the macro welfare effects of flexible labor contracts. Capturing the empirical properties observed in the data, we incorporate two labor sectors in our DSGE framework: a fixed sector and a flexible sector. The fixed sector offers contracts that exhibit rigidities in working-hours and wages while the flexible sector offers flexible contracts in both dimensions. We calibrate the model utilizing Eurozone data and show that in the benchmark currency union economy, welfare would monotonically increase if fixed sector’s wage rigidity goes up, while welfare would monotonically decline in wage rigidity if the benchmark economy were to switch to inflation targeting. We also show that it is the working-hour flexibility of flexible labor contracts that reinforces the desirability of wage stickiness in the fixed sector. Finally, we obtain strikingly different optimal flexible sector sizes for economies in currency union and inflation targeting monetary policy regimes: while the optimal flexible sector size for a currency union economy turns out to be 0%, the optimal flexible sector size for an economy with inflation targeting is 100%. These important results prevail because large fluctuations in consumption associated with flexible labor arrangements are too costly for households in a currency union with limited monetary policy flexibility — outweighing the production flexibility gains from flexible labor contracts. In this respect, our paper formalizes the welfare concerns related to the growing flexible labor sector sizes in Eurozone and urge policy makers to pay special attention to regulations that induce more flexible labor arrangements in this region.

The Power of E-Government to Accelerate Economic Growth: Panel Data Analysis on the Role of E-Government in the European Union's Economic Growth

The Power of E-Government to Accelerate Economic Growth: Panel Data Analysis on the Role of E-Government in the European Union's Economic Growth

Non-recognizing the Other? Discursive deligitimation of the EAEU by the EU

ABSTRACT The Eurasian Economic Union (EAEU), despite being regarded as the most developed integration project in the post-Soviet area, has faced different hurdles in acquiring international recognition. Especially, the EU, the EAEU’s Significant Other, has been reluctant to formally recognize it, in spite of close ties with EAEU member states as well as of its own self-image as a supporter of regional integrations. This paper focuses on this puzzle and examines how the EU has been discursively explaining its non-recognition of the EAEU at the institutional level. Based on the analysis of EU-articulated narratives since 2010, the paper reveals three dominant representations of the EAEU in the EU discourse: (1) Russia’s geopolitical project; (2) a protectionist union; and (3) a dysfunctional union. These narratives have been used by Brussels to create the EAEU’s image as a threatening Other, thus justifying why the EU cannot formally recognize the EAEU and officially engage with it. The paper also identifies five different stages of the EU’s discursive representation of the EAEU since 2010, when its tone and content varied. The paper concludes that such non-recognition from the Significant Other still limits the EAEU’s international agency despite its increasing interest in cooperation with non-Western actors.

STRATEGIC DIRECTIONS OF EFFICIENT TAX ADMINISTRATION DEVELOPMENT IN RA

In the Republic of Armenia, although the problems of improving the tax system, increasing competitiveness, improving the business environment of the national economy, and ensuring the necessary tax revenues for the state budget have always been solved with separate legislative amendments, nevertheless, the current trends in the development of the world economy, new challenges, regional developments and ongoing within the framework of economic unions integration processes have created an objective need to re-regulate tax relations. In the modern market economy, the tax policy of the state is oriented towards high-quality and competent tax administration, which significantly depends on the efficiency of the tax system. The article focused on the need for methodological reinterpretation of the theoretical problems of tax administration and tax administration was considered as a part of the management of the relations established between taxpayers and the tax authority.
 

Customs Control in the Eurasian Economic Union and the European Union: the Comparative Analysis

The study of the Institute of Customs Control is part of international integration processes. Under the rapidly changing international world facts, the international trade turnover in some directions is decreasing, and in others it is increasing at times, which affects the economy of all countries, their compliance with modern trends, part of all these processes is customs control, as one of the types of control at the state border, requiring the national security of states. The article compares the institute of customs control in the EAEU and the EU. On this basis, a comparison is made according to a number of criteria and key features. The legal regime of goods under customs control, its beginning, completion and correlation with other customs institutions are investigated. The general competence of customs authorities in the field of customs control is commented on. The circumstances of the goods being under customs control in accordance with the legislation of the EAEU and the EU on customs regulation are analyzed. As a result of comparing the institute of customs control in the EAEU and the EU, both similar and different features were identified. The comparison showed a mixed picture, since the two associations are at different stages of political and economic development, and are also characterized by different historical and geographical features.Aim. Study of the main criteria of the Customs Control Institute in the Eurasian Economic Union and the European Union.Tasks. Characteristics of the economic unions of the EAEU and the EU, as well as the study of forms of customs control in the EAEU and disclosure of customs control in the EU.Methods. Comparative legal analysis of international, supranational and customs law, as well as the study and analysis of popular science literature, description and generalization of the material in the process of research.Results. The protection of the security of the State is directly related to economic activity, namely, with the constantly flowing and increasing pace of international trade. States, uniting in unions, form a single legal field in which they create a regulatory framework. The EU introduced the institute of customs control earlier than the EAEU, since the EAEU relied on European experience when creating legislation regulating the customs area. With this in mind, this institute has similar goals and elements of the purpose of its conduct and holding.Conclusion. Actively developing integration processes lead to an increase in world trade turnover and increased control at interstate borders. Every state, and with it the unions, strive for safe and fast trade. Many elements become such tools, one of them is customs control. An institution that controls the legality, security and mutual cooperation of customs authorities and participants in foreign economic activity.

Theoretical Approaches to the Study of the Development Prospects of the Brics as an Economic and Political Union

The presented work continues a series of articles devoted to the economic and political aspects of the development of the BRICS countries. This article discusses the possible development prospects of the BRICS countries based on the hypotheses proposed by the authors of this paper. Within the framework of the presented study, the authors decided to consider the following three hypotheses of the prospects for the development of the BRICS: As the fi rst hypothesis or a relatively positive option for the development of this trade union, a political alliance can become, if implemented, all member countries of the union will be focused on mutual assistance. For example, it is assumed that in the new political alliance, Russia, Argentina and Brazil will be responsible for food security. Russia and Iran, having significant reserves of fuel and energy resources, will be able to ensure energy security in the region. China will become the main supplier of processing industry products. Another option, which is the most promising for the BRICS countries, could be the creation of an economic union. At the same time, the implementation of this initiative is the most time-consuming, since the association, in order to achieve the designated goal, must go through several stages of integration and create an institutional mechanism for the functioning of this union. At the same time, the authors of this study come to the conclusion that the BRICS member countries are unlikely to be able to implement economic integration, which is due to the significant remoteness of the countries from each other; the heterogeneity of the economic space; different levels of economic development; the difference in socio-cultural characteristics that hinder the development of economic integration. The least favorable and relatively unlikely option would be the termination of the existence of this union.

Состояние, проблемы и перспективы российско-китайского взаимодействия в области торговли сельскохозяйственной продукцией

Abstract. At present, China and Russia have a high level of political mutual trust and a stable foundation for economic cooperation. Against the background of remarkable progress in the docking between “The Belt and Road Initiative” and the Eurasian economic union, Sino-Russian agricultural trade has grown rapidly. The aim of the research. Based on the analysis of the current situation and constraints of agricultural trade between China and Russia, the opportunities for the future development of agricultural trade between the two countries are predicted. Scientific novelty lies in dividing the trade in agricultural products between Russia and China in the first 20 years of the 21st century into three stages, summarizing the characteristics of each stage, and analyzing the reasons for restricting the trade in agricultural products between Russia and China from the perspective of the Chinese side. Research methods. Qualitative analysis of the current situation of agricultural trade between China and Russia using agricultural product data from 2001 to 2020. Monographic, abstract-logical methods and the method of comparative analysis were used in the study. Results. The author provides an outlook for the future development of agricultural product trade between China and Russia, including the key to Sino Russian cooperation in aquatic products lies in the potential development of Russian aquatic products, the expansion of Sino-Russian oil and vegetable oil trade can alleviate the risk of supply shortage in China, and the steady development of Sino Russian fruit and vegetable product trade cooperation.

Evaluating a pathway for environmental sustainability: The role of competitive industrial performance and renewable energy consumption in European countries

AbstractWith the efforts of the United Nations, environmental sustainability is becoming the subject of countries. Policymakers and researchers closely follow the environmental dimensions of Sustainable Development Goals. This study offers a new perspective for the European Union economies by directly targeting SDG 9 and considers environmental sustainability policies in selecting variables. To be more precise, this study probes the effects of economic growth, trade openness, renewable energy, human capital, and competitive industrial performance on the load capacity factor for EU countries over the period of 1995–2018. This study uses the CUP‐FM and CUP‐BC approaches due to cross‐sectional dependence and heterogeneity. In addition, the study does not ignore possible structural breaks. As a result of the empirical analysis, while economic growth, trade openness, and competitiveness worsen environmental quality, renewable energy and human capital contribute to environmental sustainability. Based on the panel data results, EU economies still rely on fossil fuels to maintain competitiveness in the industry. The EU, which has 2030 and 2050 targets, can eliminate the disadvantages of competitiveness by expanding the environmental quality‐enhancing feature of renewable energy and human capital. Moreover, this study provides SDG‐oriented policy recommendations for EU countries.

Putting nuclear waste on the sustainability agenda – integration into the concept of planetary boundaries

Abstract. One part of sustainability discussions is the debate about the ecological carrying capacity of the Earth, which was initiated in the year 2009 by a group of scientists led by Johan Rockström, who proposed the concept of “planetary boundaries” (Rockström et al., 2009). The concept defines limits of the ecological carrying capacity based on scientific findings and on the application of the precautionary principle. Since then environmental and sustainability policies have increasingly referred to the concept as a global framework, as done, for example, by the Stakeholder Forum for a Sustainable Future (United Nations Department of Economic and Social Affairs, 2012) and the EU's 8th Environmental Action Program, which calls for “a systematic change to a Union economy that ensures well-being within planetary boundaries” (European Parliament and Council of the European Union, 2022, p. 24). As one of the nine boundaries, climate change requires strong decarbonization and has led to increased investments in low-carbon technologies. Hereby, nuclear power generation gains a new momentum for newly-built reactors as well as lifetime extensions due to its low-emission character required for climate change mitigation (MIT, 2018; Cometto et al., 2022). Furthermore, the EU taxonomy has set nuclear power as a “sustainable” technology classifying it as a “green” investment (JRC, 2021). Although no greenhouse gas emissions are produced during nuclear fission, it produces another form of hazardous and long-lasting waste through spent fuel accumulation. In this sense, human-made nuclear fission is also an anthropogenic impact, which increases the number of instable isotopes representing a persistent threat to humankind and ecosystems. Although the planetary boundary concept has briefly mentioned radioactive waste as being part of other toxic and human-made waste under the category “novel entities”, it has not been further elaborated since the introduction of the framework (Steffen et al., 2015; Persson et al., 2022). Instead, other forms of human-made waste such as plastics have been analyzed and quantified (Persson et al., 2022). The aim of the workshop is to discuss the role of radioactive waste management in the context of planetary boundaries from the perspective of the various disciplines of the workshop attendees. Therefore, the concept of planetary boundaries will be introduced and a global perspective on radioactive waste accumulation will be set. In small groups the workshop attendees will work on single aspects, such as reviewing the provided arguments and whether their suitability meets the criteria to establish nuclear waste as a control variable for the novel-entity boundary. The workshop can also include considerations about possible indicators and challenges for quantification as well as address the debate on whether radioactive waste may also become a resource for future generations. Finally, groups will present their results in front of the plenum and discuss the global perspective and its implications for radioactive waste management and challenges for the sustainability discourse in science and policy. To provide a balanced and interdisciplinary discourse we will invite a few speakers, who will provide input statements, and other experts in the field. It is envisaged to provide a paper with background information and data necessary to discuss radioactive waste as a planetary concept. This preliminary work serves as a basis for discussion for the workshop.

Finance for Life Instead of Death

The pursuit of a world free from hunger and poverty has been a long-standing challenge on the global stage, and a Goal for many esteemed publication sites and scholars. This research endeavor conducted by financial experts, guided by a comprehensive analysis of data from prestigious institutions such as The United States Government, European Union, International Monetary Fund, the World Bank, United Nations, and the World Nuclear Association, seeks to shed light on critical aspects of this multifaceted issue.
 Our study begins by critically examining the prevailing notion that advanced nations and economic unions, typified by the United States and the European Union, face financial constraints when endeavoring to eliminate poverty without compromising the welfare of their own populations. Contrary to conventional wisdom, empirical evidence emerges, suggesting that a mere reallocation of 2% of military spending from these advanced nations toward the noble cause of assisting developing countries could hold the key to eradicating global hunger.
 Intriguingly, as financial experts by studying audit reports we also uncover the substantial resources harbored within international institutions such as the International Monetary Fund (IMF) and the World Bank. These resources, though ample, appear underutilized in the battle against hunger-related deaths. Political influences, stemming from the significant funding these institutions receive from developed nations, may hold the key to understanding this puzzle. This revelation challenges the perception that international institutions are ill-equipped to address poverty and hunger, emphasizing the need to explore the underlying dynamics.
 While our research unveils these critical insights, it regrettably falls short of rejecting the hypothesis that underprivileged nations, like Niger, possess the natural resources required to combat hunger if only developed nations cease resource exploitation. Thus, the inescapable truth persists, developing countries require support from their more affluent counterparts.
 In summary, this research abstract encapsulates the urgency of the global effort of financial decision makers needed to combat hunger and poverty. It underscores the potential for change through resource reallocation and the imperative of addressing political influences within international institutions. These findings beckon us to bridge the gap between advanced and developing nations, ushering in a brighter future for all.
 This research promises to inform policymakers, international organizations, and concerned citizens alike, offering a deeper understanding of the intricate web of global efforts to eliminate hunger and poverty.

Exploring the energy–economy–environment paradox through Yin–Yang harmony cognition

Adopting a symbiotic perspective, this study aimed to examine the paradoxical interrelationship of the energy–economy–environment nexus through the novel lens of Yin–Yang cognitive harmony. With a broad sample of countries (6 African lions, 5 Asian tigers, 3 NAFTA countries, and 10 top European Union economies), we applied the cointegration and fully modified ordinary least squares techniques to evaluate the short- and long-term relationships between energy consumption, economic growth and carbon dioxide (CO2) emissions for the period 1980–2012. The results were heterogeneous across countries, but a curvilinear (inverted U-shaped) relationship between total economic growth and CO2 emissions in conformity with the environmental Kuznets curve was confirmed in many cases. However, there was no evidence that economic growth resulting from energy consumption has been responsible for CO2 reduction, which suggests a ‘trilemma’ – that is, a challenge in balancing energy production, economic growth and environmental degradation. From a behavioural economic perspective, this paper draws on the Kuznets hypothesis and Jevon's paradox by adopting a paradoxical frame to characterise the complex energy–growth–environment interaction as a balanced, symbiotic coexistence. It thus provides novel insights into the energy–growth–environment trilemma through an unconventional perspective based on Yin–Yang cognitive harmony (Fig. 1, see the Appendix).

Comprehensive Threats and Directions in Northeast Asia

Purpose: In Northeast Asia, not only Japan, which dominated East Asia in World War II, China, the world's second largest economy, and North Korea, a communist country that has become a religious dictatorship due to the discontinuation of the rationing system, but also Russia's military power, which was confident of taking over Kyiv, Ukraine, in three days, shows the limitations of the impact of hard power. Therefore, this study presents six threats and discussion points of Northeast Asia through case studies and suggests the direction of Northeast Asia in the future.
 Method: This study was conducted as a case study according to the purpose of the study. We selected 6 specific cases and targeted individual cases, and tried to derive phenomenological results through data collection and analysis of the collected data on social phenomena.
 Results: First, the role of governments in pandemics such as Covid-19; second, drug trafficking to finance the regime of North Korean leader Kim Jong Un; third, internal agitation and Subversion of regimes in North Korea; fourth, the Korean Wave in Northeast Asia and the expansion of Chinese espionage; fifth, China's distortion of history, repression of the Xinjiang Uyghur region, and consolidation of Islamic culture; and sixth, election interference in neighboring countries, In Northeast Asia, in addition to the governments of North Korea, China, and Russia, liberal governments such as South Korea, Japan, and the United States are strengthening their intelligence capabilities to control uncertainty, but the personal information contained in the threat information is causing controversy in their countries, and the “social value” of the value conflict between threat information and personal information collection is presented as a discussion point.
 Conclusion: Soft power, not hard power, will play an important role in the establishment of liberalism in Northeast Asia, the Internet and travel will play an important role in cultural transmission and experience, and North Korea, like China and Russia, will gradually move towards reform and opening up. And in Northeast Asia, through Japan and Korea, now China's educated population has increased rapidly, and economic polarization is increasing relative poverty. It is expected that the violent act, which started from extreme social anger, will further disturb the Chinese people and government. The Chinese government will try to protect these problems by expanding the social surveillance network through the public security force, but we must not overlook the historical case that the expansion of the social audit network, which did not harmonize freedom and control, has led to more serious situations such as regime change. The international community has already recognized that the problems of Northeast Asia cannot be solved by hard power, and it is now necessary to pursue peace and prosperity through political and economic union systems such as the EU. In this process, China and North Korea should have the courage to move towards liberalism, and the establishment of the EU model in Northeast Asia will mean a shift from a perception of an adversarial situation to a perception of cooperative problem solving, with win-win effects on population, energy, and environmental issues.

Does pandemic uncertainty spur public health expenditures? Evidence from European Union economies.

This research intends to evaluate the asymmetric relationship between pandemic uncertainty and public health expenditures in selected European Union nations (Germany, France, Sweden, Belgium, Austria, Netherlands, Denmark, Spain, Finland, and Portugal). Earlier studies used panel data methodologies to get consistent results about the pandemic-health expenditures nexus, irrespective of the reality that numerous economies did not identify such a link independently. By contrast, the present research utilizes a unique technique, quantile-on-quantile, that explores time-series dependency in every nation by offering worldwide yet country-related insight into the linkage between the variables. Estimations reveal that pandemic uncertainty increases public health expenditures in most of the selected economies at specified quantiles of data. Additionally, the data indicate that the level of asymmetries among our variables varies by country, stressing the significance of policymakers paying special attention while executing policies concerning health expenditures and pandemic uncertainty.

When opposites attract—Impact of cultural distance and polarised success in the future of economic unions

Aggregations between nations may be originated from many reasons: military, political, religious and especially economic. Basing ourselves on neoclassical economic theory and identity theory (i.e. local versus global), the aim of this research is to focus on international economic unions. Thus, we consider as economic polarizations, to investigate the levels of cultural homogeneity within the single polarization, to verify: i) whether in the single aggregation there is, in addition to economic harmonization, also cultural homogeneity and ii), if cultural homogeneity goes hand in hand with the economic success of the aggregation, with the help of Hofstede Model on 5 international economic unions. We also determine the crucial weight of cultural heterogeneity on the success of economic unions. The results also offer relevant theoretical and managerial implications for future aggregations.

Modern trends and features of the development of the BRICS group of countries as a regional integration association

The presented work opens a series of articles on the economic and political aspects of the development of the BRICS countries. This article discusses the current trends in the development of the BRICS countries, which began to form even before the current geopolitical crisis. Particular attention in the framework of the present study was paid to the periodization of the events that took place in the period under study and their relationship with the dynamics of macroeconomic indicators of the BRICS countries under study, among which, in the framework of this work, the following were considered in most detail: GDP of the BRICS countries and related indicators, in particular, share of BRICS in world GDP; the share of each country in the total BRICS GDP; dynamics of foreign trade of the BRICS countries; the given indicators of the population of the BRICS countries. Of interest is the hypothesis proposed in this paper, according to which the BRICS, which is a political union, may also have signs of an economic association, which, under certain conditions, can become an economic union in the future, which is the highest form of economic integration, which includes the signs of a customs union (cancellation customs duties in trade), common market (free movement of capital and persons), monetary union (unifi cation of fiscal and monetary policy). To substantiate the legitimacy of the indicated hypothesis, within the framework of the presented work, the indicators indicated above are considered, which make it possible to describe the economic characteristics of the presented association in a dynamic setting, which will also make it possible to analyze cross-country relationships in terms of their economic component.

Prospects and problems of creating the Eurasian economic union (EAEU) countries single electricity market

Prospects and problems of creating the Eurasian economic union (EAEU) countries single electricity market

The EU’s 2020 summit on the COVID recovery fund: leading the divided house to a consensus

Research methodology The writing of this case study was triggered by the numerous media reports in 2020 that talked about the EU nations losing its solidarity. EU being a very appropriate example of economic, monetary and customs union while teaching theories of economic integration and international relations, the post-pandemic approach of EU leadership to rebuild the crisis-ridden member nations seemed an excellent material for developing a teaching case study. The case study was written based on secondary data and published information available. Enough desk research was undertaken to build the characterisation of the protagonists and due diligence done to chronologically report all facts of the case as the story developed. It was decided to build the epilogue into the case study so that the case analysis had enough depth. Case overview/synopsis The case is set in 2020 when the global economy was reeling under the massive impact of a lockdown and the aftermath. The case study examines the model of economic union in international business and the various challenges that governance of an association of nations such as the 27 member EU can throw up. It examines the conflict of interest that can arise among member nations during critical circumstances such as the pandemic and its massive tolls. EU had established itself as a critical international trade player and had already proven their might as a united entity to the world trade partners, given the fact that they were not only a customs union but also a monetary union. In this scenario when the pandemic threw them into the whirlwind of lockdown-induced crisis, the united front of the mighty EU all but crumbled. As the worst-hit economies of Italy and Spain struggled to pull themselves back to normalcy, EU experienced one of its worst solidarity crises. EU’s president Angela Merkel and ally French President Emmanuel Macron with support from the EU Council’s President Charles Michel stepped forward to resurrect the badly hit economies. They viewed this as the best opportunity to bring about a united front by coming together at Brussels for a summit when lockdown eased up in July 2020. It was to be a show of unity to jointly bail out the severely affected member nations by grants rather than loans. The summit, however, snowballed into bitter arguments and open bickering between the wealthy and not-so-wealthy members, and they could not agree upon the issue of debt vs aid. The fact that the EU was an agglomeration of 27 nations, which were far from homogenous in socioeconomic status, not to speak of divided political ideologies, only added dimensions to the dispute. Negotiations repeatedly hit roadblocks. Can the EU leaders lead their bitterly divided house to a consensus? Complexity academic level The case is suitable for graduate and post-graduate levels. Management courses where international business studies, international trade blocs and global leadership are part of curriculum can use the case to teach concepts of “Regional economic integration”, “Economic and Political union” and theories of “International relations” and “Negotiation”. It can also be ideally used in an executive management programme on “Global Leadership” to highlight the complexities of “governance of international associations” and “consensus building amidst diversity”.