Covid-19’s Impact on Macro-Economic Policy Coordination in EU Member States

• In Event: The EU’s Response to the COVID-19 Pandemic: The Issue of Democratic Legitimacy

Abstract

The Covid-19 crisis has changed temporarily the EU budget and the possibility of the EU to lend to member states. In return, various member states have demanded some control over other member states reforms and policies. The proposed new Recovery and Resilience Facility (RRF) has therefore been embedded in an earlier system of macroeconomic policy coordination, known as the European Semester. The latter can be described as a soft governance with relatively low levels of compliance – and it is with difficulty that we can identify how much steering the EU can give member states. The RRF may change this dynamic. This paper seeks to evaluate what will happen to the EU’s socio-economic governance when the RRF is incorporated into the existing institutional structure of the previously existing European Semester. In particular, how does it affect the role of domestic actors and institutions to set their own domestic agenda? How does this influence from the EU get offset so that citizens and domestic stakeholder feel that the EU is not meddling ‘too much’ into their own domestic affairs? Based on four empirical case studies (two southern and two northern member states), this paper provides an early assessment of how Covid-19 and related EU policy choices affect the power dynamics within member states and it asks questions about their legitimacy and the democratic principles underlying this change.

Author

• Amy Verdun, University of Victoria