The impact of the COVID-19 pandemic far exceeds that of the financial/sovereign debt crisis of 2008-2012, and the economic ripple effect is still ongoing. A ‘smart recovery’ will require us to learn from the last crisis and keep in mind the weaknesses identified. The European Court of Auditors (ECA) published its latest review today, taking stock of developments in the EU’s economic and financial architecture over the past decade and flagging up unresolved challenges, potential risks and policy gaps.
The 2008-2012 global financial crisis, and the resulting economic and euro area sovereign debt crises, had long-term effects on growth and fiscal stability in the EU. Their effects were accentuated by weaknesses in the EU’s financial system and by the inadequate policy tools, monitoring and regulatory environment, as well as by the incomplete institutional architecture of the euro area. The COVID-19 pandemic is currently testing the resilience of the EU’s economic and financial architecture, in terms of both the size of the economic effect and the scale of the public response.
“We considered it important to take stock of EU responses a decade after the global financial crisis”, said Ivana Maletić, the ECA Member responsible for the review. “The economic shock of COVID-19 is far larger than that of 2008, but taking account of the lessons learned will help respond to the current challenges”.