European Integration Risks in the Context of the COVID-19 Pandemic

Abstract

Economic integration is one of the key trends in the modern economy. The undisputed leader of this process is the European Union (EU). The COVID-19 pandemic led to some instability in the EU. Brexit exacerbated this instability. Under these conditions, the question arises: is the impact of COVID-19 on European integration a one-time shock that will soon lose its significance, or are more fundamental reasons at the heart of the disintegration potential. The study aims to evaluate the risks of integration processes in the EU. Two indicators were used to quantify the degree of convergence: ?-convergence and ?-convergence. A quantitative analysis of convergence showed a high degree of convergence of countries in terms of per capita gross domestic product (GDP) and a lack of convergence in terms of labor productivity. Consumption in countries with catch-up development comes primarily from the redistribution of the EU budget and the wages of migrants. This redistribution weakens integration incentives for donor countries. And restrictions of COVID-19 pandemic weaken incentives for integration for recipient countries. Therefore, the likelihood of disintegration in the EU is increasing.

Keywords

• convergence
• covid-19 pandemic
• european union
• economic integration
• risk