Titelaufnahme

In this note we consider an economic union consisting of sovereign national states. An asymmetric shock hits the union and as a result it decides to set up a fund in order to compensate the countries in the union. We show how sacrifice theory can be used to determine the compensation payments for the countries in a way such that the relative damages after compensation are equal across countries. Finally, we apply our results to determine the Covid-19 compensation payments in the EU.