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The Visegrád Countries: Coronavirus Pandemic, EU Transfers, and their Impact on Austria

Author

Listed:
  • Vasily Astrov

    (The Vienna Institute for International Economic Studies, wiiw)

  • Mario Holzner

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The Visegrád economies have been hit hard by the COVID-19 pandemic, especially its second wave. In response, macroeconomic policies have been markedly relaxed, with fiscal stimulus packages reaching up to 14% of GDP in Poland and Czechia. The projected recovery of the Visegrád economies from 2021 onwards should be significantly helped by the massive inflow of EU transfers, particularly from the newly established Next Generation EU recovery fund. Such transfers will boost their economies by between 2.1% per year in Slovakia and 1% in Czechia, at a minimum; the effect should be stronger once EU transfers to other member states are taken into account. The cumulative boost to the Austrian economy in 2021-2022 from EU transfers to the Visegrád countries is estimated at least at 0.12%, thus partly offsetting the net contributions paid by Austria to the EU budget (which stood at 0.31% of Austria’s GNI in 2019). Given strong cross-border spillovers of fiscal policy measures and historically low interest rates, the governments of the Visegrád countries and Austria (and Germany) should be interested in a more expansionary fiscal policy at EU level for the benefit of the less-developed EU member states. In addition, greater co-ordination of national policies among the above-mentioned countries would be advisable in the planning and implementation of COVID-19 restrictions, as well as in the resolution of mass insolvencies that are likely to follow the withdrawal of large-scale fiscal stimulus measures. It might also be advisable to establish joint Central European working groups to analyse possible scenarios of the economic situation in the post-COVID world.

Suggested Citation

  • Vasily Astrov & Mario Holzner, 2021. "The Visegrád Countries: Coronavirus Pandemic, EU Transfers, and their Impact on Austria," wiiw Policy Notes 43, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:pnotes:pn:43
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    File URL: https://wiiw.ac.at/the-visegrad-countries-coronavirus-pandemic-eu-transfers-and-their-impact-on-austria-dlp-5600.pdf
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    References listed on IDEAS

    as
    1. Jérôme Creel & Mario Holzner & Francesco Saraceno & Andrew Watt & Jérôme Wittwer, 2020. "How to Spend it: A Proposal for a European Covid-19 Recovery Programme," wiiw Policy Notes 38, The Vienna Institute for International Economic Studies, wiiw.
    2. Alexandra Bykova & Julia Grübler, 2020. "Nachbarschaftsbeziehungen auf dem COVID-Prüfstand," wiiw Research Reports in German language 17, The Vienna Institute for International Economic Studies, wiiw.
    3. repec:hal:spmain:info:hdl:2441/2gtm5um5lm9vvo08gf2gn4a066 is not listed on IDEAS
    4. Amat Adarov & Gabor Hunya, 2020. "Foreign Investments Hit by COVID-19 Pandemic. FDI in Central, East and Southeast Europe," wiiw FDI Reports 2020-12, The Vienna Institute for International Economic Studies, wiiw.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Vasily Astrov & Robert Stehrer & Zuzana Zavarská, 2022. "Recovery and Resilience Facility Funding in the Visegrád Countries and its Impact on Austria," wiiw Policy Notes 56, The Vienna Institute for International Economic Studies, wiiw.
    2. Irena Jindrichovska & Erginbay Uğurlu, 2024. "Effect of COVID-19 on the mutual trade between Germany and the Visegrad Four," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    3. Niftiyev, Ibrahim & Huseynova, Rena, 2021. "How has the Self-Perceived Health Shaped the COVID-19 Causalities in the Visegrad Countries?," EconStor Conference Papers 234511, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    Keywords

    fiscal policy; EU transfers; fiscal multiplier; input-output tables;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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