Economic experts’ predictions of a slowdown in the EU’s global economy and economic growth in the year 2020 were based on various risks and uncertainties existing on a world scale, ranging from the US-China trade war, traditionally strained relations of the EU and the US on the one hand and the Russian Federation on the other, all the way to BREXIT and economic migration to developed EU countries. However, the COVID-19 pandemic has further aggravated those forecasts, so that the entire EU is recording a historic decline in all macroeconomic aggregates. The beginning of the pandemic in the EU was accompanied by the complete border lockdown of the entire Union, which greatly affected the economies of the member states. The EU is experiencing a decline of both real and nominal GDP, declining incomes, employment decline and unemployment increase. This paper will investigate the impact of COVID-19 onto GDP, unemployment, and EU public debt. Correlation-regression analysis confirms the positive correlation between these variables and the economic crisis caused by the COVID-19 pandemic. In addition to the economic crisis, a crisis of EU health systems, which requires huge economic investments. A more prominent economic recovery is hard to expect until the global pandemic ends. One thing is for certain, this economic crisis will continue in 2021, whereby a more significant recovery is expected only in the year 2022. Certainly, it will take years to make up for the economic losses caused by the pandemic.

The economy of the Republic of Srpska is burdened by inherited (structural) issues and a sluggish adjustment of the current economic policy to the contemporary global trends. According to the standards of the WB, IMF and Kuznets, the Republic of Srpska is classified as a small economy. Just like Bosnia and Herzegovina or any other countries of Western Balkans, it too is finalising the transition to a market economy. The Republic of Srpska features insufficient GDP growth rates. Under such circumstances, there is a need for enticement of GDP growth. Consumption (both final and public) as well as all forms of investment affect economic growth, with FDIs having a particularly important role. In most countries, there is a positive correlation between investment and GDP growth. Likewise, there is a positive correlation between GDP growth and final consumption. Therefore, the Republic of Srpska, as well as any other small economy, resorts to attracting investments and increasing final consumption. However, the issue is that public debt maintains its growing trend in most of such transitional economies. This paper contains the quantification of the impact of investments and consumption onto the GDP of the Republic of Srpska. It has been proven that the final consumption and investments affect GDP growth in the Republic of Srpska. Correlation-regression analysis confirmed a positive correlation between the mentioned variables. This development policy affects the continuous growth of public debt and brings the increase in the share of government (public) consumption in total consumption. In addition, it also affects the insufficient efficiency of investments. As a consequence, low productivity and insufficient competitiveness emerge, followed by the occurrence of other economic and social problems. Therefore, the Republic of Srpska and Bosnia and Herzegovina need to complete the initiated reforms and expedite their EU integration, modernize and restructure their industry as per the requirements of the global market, reduce the costs of public institutions and increase their overall competitiveness.

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SUMMARYThe European Union is the most complex and by any aspect the most unique example of a regional economic integration. Its origin, evolution and survival are based on a common legislative and institutional framework. The so-called common policies implemented in a number of economic and non-economic areas are particularly distinctive. Most of them are implemented on two levels: national and communal. The only common policy that is fully implemented at the European Union level is the Community Agrarian Policy (CAP), whereas the agriculture has the highest expenditure in the communal budget. The function of CAP is primarily economic as its goals are strictly related to economic issues: price stability of agricultural products, productivity growth, higher wages for the farmers, etc. The CAP strengthens the Union's social cohesion, which is of utmost importance in times of constant crises, BREXIT and other extreme instabilities. For this reason, the CAP has been in the processes of continuous reforms (MacShary, Mansholt and those of recent times) for decades, in order to increase its efficiency and justify enormous financial investments. The CAP results depend on the achievement of preset objectives and the exchange of agricultural products and food that the European Union generates globally. It has been demonstrated that the CAP is a significant common policy, both in achieving economic goals and in the sphere of strengthening communal cohesion.

More than 150 years after the Engel document "Die Productions und Consumptionsverhaltnisse des Königreichs Sachsen", economists and policy makers pay tireless attention to his work, especially its applicability and relevance in different economic contexts. Households with low living standards will spend more money to cover basic needs (food, clothing, housing, etc.). As incomes increase, spending is focused on buying goods for their comfort (health, transport, recreation and culture, tourism). The aim of this paper is to examine the value of Engel 's law in household consumption in Bosnia and Herzegovina in the periods from 2004, 2007, 2011 and 2015. Secondary data from the following database were used to interpret household dynamics: I MB, NIS, EUROSTAT and the BiH Agency for Statistics. We investigated the relationship between consumption and income through regression analysis and found that Engel's law is applied in the BiH economy, with specific developments and impacts. In developed economies, the transition to services and consumption is faster. In this paper, a nonlinear double logarithmic regression model will be used to test the validity of Engel's first law of the influence of income on the value spent on the purchase of food and soft drinks. The paper is organized into four parts as follows: after reviewing the literature, the data and methodology of the study are presented, the fourth part is focused on the research results, and the last part is dedicated to the conclusions.