The Resilience of EU Member States to the Financial and Economic Crisis

Abstract

Based on the JRC conceptual framework for resilience (Manca et al. in Building a Scientific Narrative Towards a More Resilient EU Society, JRC Science for Policy Report, JRC28548, 2017), this study presents an empirical analysis of the resilience of EU Member States to the recent financial and economic crisis. We address two main research questions: (1) Which countries had a resilient outcome, in terms of both shock absorption during the crisis and recovery in its aftermath? (2) Are there pre-determined country characteristics that help to explain resilient performance? To address these questions, we first select 34 key indicators of economic performance and societal well-being, going well beyond the merely economic growth perspective. Resilience is then measured by the properties of the joint dynamic response of these variables to the crisis shock at different time horizons. Our results demonstrate substantial differences between countries in each of the resilience capacities considered. Regression analysis also reveals that certain predetermined characteristics—such as government expenditures on social protection, political stability or a favourable business environment—are strongly associated with resilient outcomes. Our methodology and findings offer lessons for monitoring resilience and for entry points for effective policy interventions in the future.