The EU’s New Economic Governance Framework and Budgetary Politics in the Member States: Reinforcing the Democratic Deficit?

The euro area crisis has not only changed the EU’s economic governance framework but has also produced a crisis of legitimacy across the union. While the institutional repercussions at the member state level have partly been studied, the democratic impact has thus far received less attention. This article aims to fill this gap and advances an analytical framework which establishes a link between the reformed EU economic governance structure and the democratic features of national budgetary decision-making. Building on the V-Dem database, the article analyzes the transformative potential of the post-crisis EU economic governance architecture on the representation, openness, inclusiveness, transparency, accountability, effectiveness, and responsiveness of national budgetary politics. We add nuance to the V-Dem data through detailed case studies of post-crisis budgetary politics in Austria, Italy, and Portugal, finding a (partial) strengthening of input and throughout legitimacy which contrasts with a weakening of output legitimacy. While high-quality throughput cannot compensate for deficits in input or output legitimacy, we submit that these procedural improvements should not be overlooked in discussions about the impact of the euro area crisis on national democracies across Europe.