European Integration in the Post-Pandemic Era: Back to Supranationalism? A 'Critical Junctures' Analysis

The Covid-19 pandemic stands as a symmetric health crisis with asymmetric economic consequences for the Member States of the European Union (EU). With its dramatic death toll and economic impact, it constitutes a formidable institutional challenge for the EU after its failure to address the Euro crisis. Given the scale and scope of the pandemic, the first response of the EU was prompt and substantive. Following a proposal by the European Commission, in late-July 2020 the European Council agreed to set up a Recovery and Resilience Facility (RRF) of an unprecedented nature. To provide it with the necessary liquidity, the European Commission is authorised to borrow on the capital markets on behalf of the Union, thus going so far as to manage a common debt. Yet, the implications of such a ‘Hamiltonian moment’ on the institutional governance of the EU are not clear. This paper adopts a ‘Critical Junctures’ framework to understand the impact of the Covid-19 pandemic on European integration and EU governance. While the literature has widely referred to Critical Junctures to account for radical change following the Covid-19 pandemic, what makes them ‘critical’ often remains unexplored. The paper opens the black box of Critical Junctures through a conceptualisation and subsequent operationalisation, before applying such an analytical framework to the EU’s response to Covid-19. Critical Junctures are here defined as composed of: a) a Generative Cleavage, i.e. the exogenous shock that opens up a window of opportunity for institutional change (e.g. a macroeconomic crisis, social unrest, or threats to national security); and b) radical, swift and encompassing institutional change. These factors are separately a necessary condition and jointly a sufficient condition for a Critical Juncture. On this basis, the paper embarks on a comparative analysis of two crisis-management tools – i.e. the European Stability Mechanism (ESM) as a response to the Euro crisis and the Recovery and Resilience Facility (RRF) as a response to the Covid-19 pandemic. The comparison looks at a) the establishment of the two instruments, that is their legal basis and the decision-making procedure behind their adoption, and b) the governance of the two instruments, that is their logic of functioning. The findings show that the Covid-19 pandemic does constitute a Critical Juncture of European integration as it moved crisis-management from intergovernmental coordination (with the ESM) to a form of limited supranational delegation (with the RRF).