The COVID-19 pandemic has brought much human suffering. It has underlined that risks to the foundations of human well-being are real global threats with multiple knock-on effects on economy and society. While the crisis is global, the impacts are territorially different. Well-connected urban areas were among the first exposed to the pandemic. In rural areas, older and less healthy populations often faced limited healthcare capacity. In urban and rural regions alike, poor areas with crowded living and working conditions have suffered worse health outcomes. The economic crisis COVID-19 has triggered exceeds the global financial and economic crisis from 2008 in scale and regional differentiation. Employment at risk varied from less than 15% to more than 35% across 314 regions in 2020, often reflecting sectoral specialisation, such as in tourism. Potentials for remote working are also uneven. Differences in non‑standard employment contribute to regionally different employment and poverty impacts across regions. This includes undeclared, temporary or self-employed workers, who often benefit less from social protection.

Governments at all levels have taken unprecedented actions to contain the spread of COVID-19 and mitigate the large economic impacts. Local and regional actors play an increasingly important role. The substantial costs of the COVID-19 pandemic to human life and economies and their territorially different impacts highlight that a place-based, co‑ordinated policy response is central. While central governments need to set the strategy, bottom-up approaches produce inclusive, local responses. Preventive, anticipative action minimises major adverse impacts on health, well‑being and the economy. In view of the bigger health and economic impacts on vulnerable groups, efforts to halt the pandemic need to be combined with support to disadvantaged areas. Hardest-hit regions and cities may face the biggest loss in revenues and the biggest increase in spending. Without concerted action, this could derail rebuilding efforts in the regions hit the most. Multi-level public finance arrangements need to respond to asymmetric increases in healthcare needs, unemployment and poverty. Societies have shown they are willing to act to overcome the crisis. This can inspire lasting transformations, notably to address the climate challenge. National, regional and local governments need to deploy economic stimulus in a way that is consistent with these transformations.