Turmoil, conflicts, wars and terrorism have appeared in the world since ancient times. In the original community, conflicts between the tribes appeared due to the need for food, water, or shelter. With the development of society, conflicts evolved into wars because people were struggling with external enemies or they were trying to master the resistance within the state. . Recently, special attention is dedicated to terrorism, which is why certain individuals or groups of individuals are trying to achieve political and social goals by violence. The aim of this paper is to explain how armed conflicts affect countries economy in The European Union. An analysis was carried out in 28 EU member states over the period from 2000 to 2015 with the help of the Generalized Method of Moments (GMM) and dynamic panels. Dynamic panel models contain a dependency variable with a lag for one or more reverse periods depending on the properties of the dependent variable. Tested hypothesis have confirmed that the growth of armed conflicts affects GDP growth and that in more developed countries there is a greater possibility of their outbreak. Armed conflicts leave various consequences such as human sacrifices, change of borders, and political change. The causes of their outbursts are desire to dominate, deterioration of the market position, increase of military power and others. But mainly reasons are economic or religious nature. The fact is that the emergence of armed conflicts will never be prevented, but all the negativities they come with, it seems they ultimately affect on development of the economy.