This panel explores the implementation of the Recovery and Resilience Facility (RRF) seeking to unveil the distinct forms of politicisation of the Economic governance instruments after the pandemic and their effects on the evolving relationship between the Union institutions and the governments of the Member States. The adoption of the RRF in 2020-2021 had been hailed as a ‘Hamiltonian’ moment in EU politics signifying a paradigmatic shift in European fiscal integration. Unprecedented levels of EU borrowing in capital markets enabled the Union to support the recovery of Member States through the allocation of grants and loans. What received less attention at the time was the conditionality attached to the funding and the strong linkage of the new fiscal instrument with the pre-existing Economic governance mechanisms, particularly the European Semester. The implementation phase of the RRF marked the introduction of the European recovery agenda into the realm of domestic politics highlighting the political contestation of European fiscal and macroeconomic policies at the national level and the centralisation of authority by the EU institutions.

The presenting authors examine the issue of the politicisation of the Recovery and Resilience agenda by departing from different theoretical bases allowing them to shed light on different aspects of the process. The discussion is expected to present a strong comparative dimension as the papers base their findings on the analysis of empirical material taken from four Member States: France, Germany, Italy and Belgium. The dialogue will also touch on wider issues of EU policymaking, such as the domestic usages of Europe by national-level politicians, the challenges of fiscal federalism in the EU, the contractualisation of the relations between the Union and the Member States and the impediments set by the EU governance to the renegotiation of social contracts at the national level.

In response to the covid-19 pandemic and its economic fallout, the European Union (EU) adopted the ‘Next Generation EU’ (NGEU) funding programme, the centrepiece of which was the Recovery and Resilience Facility (RRF) to support economic reforms and investments in EU countries. In order to access this funding, EU member states had to submit National Recovery and Resilience Plans (NRRPs) prepared in consultation with the European Commission. This paper examines the domestic factors that have affected the formulation of the NRRPs by focusing on reforms, rather than investments. Three features of the reforms are of particular interest: their intensity and scope; their timing; and the extent to which they incorporate Countries-Specific Recommendations previously adopted by the EU. The paper engages in a structured focused comparison of three country studies – Germany, France and Italy - as well as within-case process tracing of the Italian case. It is argued that Italy used its NRRP as an ‘external constraint’ to bring about far-reaching domestic reforms, while Germany committed to minimal reforms, and France took a midway position. This variation is primarily explained by the domestic politics of the formulation of NRRPs and, in particular, the different domestic ‘usages of Europe’ by national policy makers.

This paper analyses the implementation of the European Union (EU)'s Recovery and Resilience Facility (RRF) in order to explore the degree of political contestation during this phase of the policy-process. It does so by reviewing in detail developments in Germany and Italy, two of the EU's largest member states who are traditionally on opposite sides of its fiscal and budgetary politics. With the adoption of the RRF as a common debt instrument designed to address the socio-economic consequences of the COVID-19 pandemic, the EU has taken significant strides towards deeper fiscal integration, consolidating an executive power shift. Building on post-functionalist theorising and the literature on dissensus, the paper examines the politicization and contestation of the RRF's implementation, questioning whether political dissensus played a role in mitigating the executive turn in EU politics. It focuses, in particular, on two key dimensions. The first dimension concerns the relationship between EU authorities and member state governments, highlighting issues related to the 'ownership' of the National Recovery and Resilience Plans (NRRPs). The paper explores the dynamics behind this relationship and how it shaped the course of RRF implementation in Germany and Italy. The second dimension centres on the interplay between national majority and opposition parties regarding the allocation of EU funds. The study sheds light on the contentious debates between political actors in these countries, examining whether and how political dissensus was actually channelled into the design and execution of the RRF. Through a comparative analysis of developments in these two cases, across these two dimensions, this paper provides a theoretical interpretation of the challenges of implementing a common fiscal instrument within the EU, and the potential for (overcoming) dissensus in this critical area of policy-making.

For more than a decade, the European Union is facing a “crisis of values” due to the systemic deterioration in certain Member States of the EU’s founding values, such as democracy, the rule of law and the protection of fundamental rights. Unfortunately, the political and jurisdictional mechanisms provided for in the Treaties to protect the rule of law have proved ineffective – for both legal and political reasons. The European Union has therefore sought to strengthen its Rule of Law policy both by specifying the normative content of this concept and by creating instruments to promote it. In this regard, the Covid-19 pandemic marked an important turning point in the fight for the rule of law as it provided an opportunity for the European Union to enhance a new strategy. This strategy is based on instruments that were not specifically designed nor envisioned to protect the rule of law, namely the European Semester, the Recovery and Resilience Facility, the European structural and investment funds, and the protection of EU’s financial interests. This contribution aims to analyse the changes the new EU’ strategy brings about in the way the rule of law is understood and protected at the EU level and the consequences of such changes. Indeed, cohesion, budgetary and economic instruments mainly concern those dimensions of the rule of law that are conducive to growth – such as justice systems and the fight against corruption. It could consequently lead to an economisation of the concept of the rule of law, in the sense that the rule of law would no longer be understood as a limitation on the exercise of public power but instead describes the essential characteristics that a legal system must have to ensure growth. Paradoxically, the economisation of the rule of law exacerbates factors that have contributed to the rule of law crisis, such as the lack of a social dimension and of the legitimacy of the Union. Indeed, this strategy implies a managerial approach – insofar as it based on indicators, the contractualisation of the relations between the EU and the Member States, etc. – and entrusted to non-majority institutions.

In January 2023, the European Commission delayed the payment of a €847 million from the Recovery and Resilience Facility to Belgium, on the grounds that the envisaged pension reform would deteriorate the already bad budget position of the country, which now has a debt-to-GDP ratio and budget deficit among the highest in the EU. One of the main political leaders in the country accused the European Commission to “blackmail” the federal government. Against this background, this paper asks to what extent the legitimacy of the European Commission and its scrutinizing and steering competences of the recovery agenda were questioned. Based on a qualitative inquiry involving the process tracing of events and semi-structured interviews, this paper investigates the legal and political underpinning of the conflict, and the forms that the politicization of the RRF took. Overall, the paper shows that, while the RRF is presented as the hallmark of a new political era in the EU, there is continuity as far as sensitive policy areas and macro-economic conditionality is concerned. Yet, as far as Belgium is concerned, the role of EU governance (and the European Commission) acts as a constraint to forge necessary compromises.