CESEE countries would be especially hit by a new iron curtain, although they might also benefit from trade deviation. As we all know, the Russian war is not the only crisis spurring transformation in Europe and the world; other pressing concerns are the COVID-19 pandemic and climate change. Despite substantial differences, all three crises have important commonalities.
Economically speaking, they are above all supply shocks, and they impact specific sectors unevenly. And like all supply shocks, they cause a dilemma for monetary policy. Containing the COVID-19 pandemic had limited success across the globe, given insufficient support for vaccination campaigns in low- and middle-income countries.