From the Sovereign Debt Crisis to NextGenerationEU: Fiscal-Economic Responses in EU Crisis Governance

This paper compares EU responses to the COVID-19 crisis to earlier ones, notably in the framework of the European sovereign debt crisis. With a focus on monetary and fiscal regulation in the realm of macroeconomic policy, we compare latest steps to those taken earlier, seen through different theoretical lenses. While there are many similarities, EU-level answers to these two crises differ: it is likely that the pandemic, creating immense challenges in terms of socio-economic effects across the EU, including rising levels of inequality within and between EU member states, may provide a ‘push’ towards further integration, as national political responses are seen as inadequate to address the magnitude of the challenges. The Covid-19 health crisis, while initially characterized by disjoint answers taken by EU member states and a resort to national-level measures, is hence likely to create incentives for EU member states to take further integrative steps, affecting prospects for the EU to gradually move closer to a fiscal union. Similarly, these developments are likely to affect the ways the EU deals with actors on the global level, including in the framework of the UN. Accordingly, we see different effects when comparing responses to these two major crises and a gradual move away from 'failing forward' to a more encompassing approach.