A tale of two crises

This paper examines and compares the economic and political effects of two major crises in the Eurozone, the sovereign debt crisis and the COVID-19 pandemic. It analyzes the divergent responses of core and peripheral countries in terms of GDP, public service expenditure, income inequality, and political trust. While the debt crisis led to a persistent divergence in economic outcomes and increased populism, the coordinated response to the COVID-19 crisis fostered a faster recovery and renewed convergence. The study highlights the importance of timely, coordinated policies in mitigating the adverse effects of large-scale crises on the European Union's cohesion.