Sustainable economic development in the European Union and COVID-19

Abstract

The paper has two basic objectives. The first, is to present the evolution of the process of sustainable development in the European Union (EU). We provide evidence that over time, the concept of sustainable development as a broad policy objective has been steadily declining in importance giving way to the less multidimensional strategy of green growth. We argue that the green growth strategy is actually based on the strategic selection of the traditional economic growth model, taking into account certain environmental aspects. We show that environmental protection expenditure is growing much slower than per capita income. Looking at the investment on environmental protection, we document a clear falling trend. Our findings imply that both the social and the environmental dimension of sustainability have been losing ground and the traditional goal of economic growth is being restored. The second, is to provide some assessment of the impact of the coronavirus pandemic on the process of sustainable development in the EU. Considering the relevant EU forecasts on the immediate effects of the pandemic, we conclude that it will severely hinder the process of sustainability in the EU in the short term. The long-term effects of the pandemic cannot even be outlined, especially at the level of the individual member states. Nevertheless, the effectiveness of the Recovery and Resilience Facility as key instrument of recovery and of national recovery and resilience plans, will play a decisive role in minimising or even neutralising the negative longer-term effects of the coronavirus pandemic.