Investigating the Impact of Geopolitical Risks and Global Uncertainty on the EU-27 Economies

This study examines the interplay between uncertainty, geopolitical risk, and key macroeconomic and financial variables in EU-27 economies (1980–2022) using Panel VAR GMM. It also explores how these economies, grouped by time of EU accession, respond to global crises. The findings indicate that uncertainty and geopolitical risk weaken GDP growth, investment, trade openness, and market capitalization, with Eastern and Central European economies experiencing more pronounced adverse effects. Being in the EU core offers partial risk mitigation, whereas structural vulnerabilities in periphery economies necessitate tailored policy responses. Crises exacerbate global and European uncertainty and reduce capital formation, trade openness, and output.