The state of the cross-border economy in the Baltic Sea Region in modern conditions

Abstract

The current economic crisis has been caused by the constraints of the COVID-19 pandemic, which has weakened the state of the economy. This study aims to identify and describe the status and development of COVID-19 in the Baltic Sea Region and to identify the economic consequences and changes in the economy caused by the pandemic. The situation is exacerbated by the extreme uncertainty of the actions taken by the public administration in the border regions. These include, above all, the lack of concrete and transparent measures to impose quarantine in specific sectors, the forced restriction of the population’s economic and commercial activities, the limitation of access to recreational areas for the entire population, the displacement to remote work and education, the closure of childcare and pre-school institutions. The scale and nature of the consequences of all these restrictions in different sectors and industries need to be clarified. All this adds to the complexity of developing specific measures to respond to the crisis in the prevailing conditions. There is an urgent need to recognise crises and new challenges in border regions, which rapidly change in pandemic conditions and affect people on both sides of the border. The well-established principle of a “Europe without borders” has been shaken, and countries that have abruptly closed their national borders have done so unilaterally. A multiple regression study of selected macroeconomic indicators of the COVID-19 pandemic is conducted. The scale and nature of the consequences of sudden border closures on population movement in the Baltic Sea Regions are shown. All these restrictions peaked in 2020; unfortunately, the COVID-19 spread has yet to improve. Government measures applied to overcome the crisis must therefore identify the most effective way to restore lost positions and outline the future development of the border regions.