Purpose: The stability of exchange rates facilitates international trade, diminishes portfolio risk, and ensures that economic policies are effective. The war in Ukraine is showing that the European financial system is still fragile to external shocks. This paper examines the consequences of the Russian invasion of Ukraine on five Euro exchange rates. The final goal is to empirically test whether the ruble caused the euro to depreciate with the Russian invasion of Ukraine.Design/methodology/approach: The exchange rates analyzed are Euro/Russian Ruble, Euro/US Dollar, Euro/Japanese Yen, Euro/British Pound, and Euro/Chinese Yuan. The data collected are daily and cover the period from November 1, 2021, to May 1, 2022. In this context, the changes in the FX rates reflect two months of the ongoing war in Ukraine. The FX rates used in the study contain 137 observations indicating five months of daily series.Findings: The results from impulse response function, variance decomposition, SVAR, and VECM indicate that the EUR/RUB significantly influenced the Euro devaluation. On the other side, the FX rates used in our work altogether hold long-run cointegration. The situation is different in the short run, where only EUR/RUB, EUR/USD, and EUR/CNY possess significant relations with other parities.Originality/value: The Ruble is not among hard currencies, but its position strengthened during this period due to the importance of Russian gas to the Eurozone. The results indicate that even weak currencies can be influential depending on the geopolitical and economic situation. To this end, diversification remains a valid concept not only in portfolio construction but also for the preservation of the national economy.

The coronavirus outbreak in 2020 shattered economies, public health and public well-being worldwide literally overnight. In response to the pandemic, most countries implemented a delicate balance of policy stringency and economic support to ensure public health, social security and a vibrant economy. With the pandemic slowly phasing out, our article explores the effectiveness of various governmental strategies for ensuring economic growth. The proposed econometric model is tested using panel quarterly data for 49 (37 OECD + 12 non-OECD) countries for all four quarters of 2020 and the first quarter of 2021. Our findings show that policy stringency and economic support are both negatively associated with economic growth. We also find that the stringency was largely responsive, oriented to preventing the collapse of health systems after infections had already become widespread, not towards saving human lives by preventing soaring levels of infection. While our findings appear to lend support for the view that a trade-off between human lives and the economy was inevitable, we also challenge this view by evidence that some countries were able to secure a double dividend of maintaining public health and a vibrant economy by a prudent far-sighted stringency policy of preventing the virus outbreak.