The EU Regulatory State in a Turbulent Age. Implications of COVID-19 Crises Responses for the Core of Integration

When Europe became the epicenter of the COVID-19 pandemic there were immediate and dramatic effects for the Single Market. National borders were shut down, travel restrictions were imposed, and the transportation of goods slowed. Over the next few weeks, a €750 billion recovery fund combining grants and loans was approved. The measures taken by the EU were unprecedented as they introduced a large-scale common debt issuance and a temporarily increased budget. Much of the attention has focused on the EU’s high-level responses to the crisis.. The EU’s state aid regime is of long standing within the EU, dating from the Treaty of Rome, whereas banking regulation is largely the product of the previous financial and economic crisis. Yet, in these areas, the EU holds core regulatory powers that help it to adopt determined crisis responses. These are policies predominantly shaped by non-majoritarian actors as the key protagonists of the regulatory state. In focusing on these two policy areas our aim is to examine the type of (institutional) change that has occurred in these policy areas. We frame our analysis using a historical institutionalist approach drawing on the literature on gradual institutional change (e.g. Mahoney and Thelen, 2010), which identifies four types of change: displacement, layering, drift and conversion. As we are specifically interested in rules and norms, we find this approach appropriate for the analysis of policy regimes where our aim is not to focus on the dramatic shifts that occur when crises hit, but more on the medium term consequences of crisis measures. While the four categories mentioned above offer a useful framework for the analysis of our two cases, we also question the appropriateness of these categories. As a corollary of our analysis relating to types of change, we subsequently draw out implications for the direction of change (resilience, retrenchment or reconfiguration), with the ultimate aim of drawing interim conclusions as to the impact of the crisis on the EU regulatory state.