The small states of the European Union and the resilience/competitiveness nexus

Abstract

This article places the European Union (EU) small states within the Vulnerability and Resilience Framework, and tests the correlation between economic resilience and competitiveness. In this analysis, economic resilience is associated with good economic, social and political governance, and economic vulnerability is associated with exposure to external shocks, mostly due to a high degree of trade openness. The findings indicate that (a) that the EU small states tend to exhibit a high degree of economic vulnerability, suggesting that they are highly exposed to external shocks and (b) that the most economically vulnerable EU small states tend to register relatively high resilience and competitiveness scores. This would seem to suggest that economic resilience and competitiveness are related and that their policy framework enables them to withstand or reduce the harmful effects of their exposure to economic shocks.