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Coronavirus and the cost of non-Europe: An analysis of the economic benefits of common European action

Written by Tatjana Evas, Aleksandra Heflich, Niombo Lomba, Klaus Müller, Cecilia Navarra, Lauro Panella, Jérôme Saulnier,

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Although the European Union is about much more than economics – promoting peace, common values, democratic governance, international development, human rights, health, social protection, research and innovation, and many other public goods – the process of European integration has been key to driving economic growth for half a century, generating significant gains in gross domestic product (GDP) for EU Member States both collectively and individually.

This EPRS paper focuses on the economic benefits of common action and what is at risk if the current coronavirus crisis and its aftermath were to stall or reverse the process of European integration. It attempts to quantify the losses entailed if the economic downturn caused by the pandemic were to result in the gradual dismantling of the EU project and a parallel failure to take advantage of the unexploited potential of collective public goods that could yet be created. In this respect, the study makes use of two complementary concepts: European added value, which attempts to identify the benefit of existing collective action at European level, and the cost of non-Europe, which assesses the benefits foregone by not taking further action in the future.

Even cautious estimates suggest that dismantling the EU single market would cost the European economy between 3.0 and 8.7 per cent of its collective GDP, or between €480 billion and €1 380 billion per year. In parallel, the potential cost of non-Europe in 50 policy fields was identified by EPRS in 2019 as around €2.2 trillion or 14 per cent of EU GDP (by the end of a ten-year running-in period). It follows that if both problems were to develop at once, the EU economy would eventually be between 17.0 and 22.7 per cent smaller than might otherwise be the case. (This is in addition to any direct contraction of the economy as a result of the coronavirus crisis itself, which could be around 7.5 per cent of GDP in 2020, or €1 160 billion).

The potential figures for the first component would depend on the extent of any dismantling of the Union, which in this paper is analysed through various scenarios, such as the substitution of the EU with a standard regional trade agreement, further loosening of the Union by abandoning the Schengen Area and coordination in other areas, and/or full dissolution of the EU with a fall-back to World Trade Organization (WTO) rules.

Read this complete ‘in-depth analysis’ on ‘Coronavirus and the cost of non-Europe: An analysis of the economic benefits of common European action‘ in the Think Tank pages of the European Parliament.

About EAVA

The European Parliament's European Added Value Unit provides European Added Value Assessments and Cost of Non-Europe Reports which analyze policy areas where common action at EU level is absent but could bring greater efficiency and a public good for European citizens.


One thought on “Coronavirus and the cost of non-Europe: An analysis of the economic benefits of common European action

  1. It would cost a few countries (Mainly the Germans) a lot of money but the others would thrive again with a return to floating currencies which would allows their economies to devalue their way to growth & competitiveness again. While ever they are tied by a ball & chain into the Germanic Euro they will never get off the hamster wheel of high debt low growth austerity model the ECB imposes on them. The rest of the EU26 will grow if they left the Euro or the Germans left the Euro & for the Euro to succeed the French with their subsidy junkie mentality would also need to leave the monetary union & end the protectionist mind-set.

    Posted by Joe Thorpe (@JoeThorpe1963) | May 13, 2020, 12:35

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