Abstract. The article examines the economic, social and political processes in the European Union in the context of the COVID-19 pandemic. Coronavirus restrictions, which have paralyzed economic activity for several months, provoked a record GDP drop in the EU, increased structural imbalances and the economic lag of European countries behind global leaders — the United States and China. In response to the new recession, large-scale economic and employment support measures were taken by national governments as well as at the supranational level. The latter include a €750 billion temporary recovery instrument named Next Generation EU, which will not only mitigate the effects of the pandemic, but also smooth out the growing contrasts between the economically developed Northern countries and the Southern European periphery.