The outbreak of a global pandemic caused by COVID-19 is without precedent and apsolutly singular in the whole economic history and it will leave deep scars on the world economy. The purpose of this paper is to examine the negative effects which this crisis will cause on the Croatian market and what measures must be taken to stabilize the situation. We will take a close look at the previous global pandemics and show how they affected the world and the economy such as the Black Death and The Spanish Flu. Furthermore, we will list the economy policies Croatian goverment must apply to negate the effects of the pandemic aswell as the Croatian central bank who is one oft he main actors at the present crisis and what changes they made to counter the crisis. We have analyzed the estimates of GDP decline and compared it with the previous year and came to the conclusion that there would be a record decline in GDP. Nevertheless, we can say that we have gone through the worst period of the pandemic and are on the road to recovery, regardless of how long the process will take. We investigated the impact of the pandemic on the labor market and its impact on the growth of the unemployment rate, a major problem that the Republic of Croatia has been facing for many years. We will also define the crisis and how the European Union is taking care oft he situation in this global economic catastrophe and what effects will those newly implemented changes have. The COVID-19 pandemic has worsened the economic prospects of the Republic of Croatia and Europe and although there are various forcecasts for both Croatia and Europe, many agree that there will be a serious recession coming for us all.