Populism and the EU’s economic governance: adding an extra layer of complexity?

Populism seems to have a significant impact on EU economic governance. Populist governments have pushed for looser fiscal rules, higher government spending and often less oversight and discipline, putting pressure on the EU’s Stability and Growth Pact. Yet, we seem to know little, how populism has actually challenged the traditional policy-making processes and institutions of the EU’s economic governance framework. The aim of this paper is to analyze how populist governments have shaped decision-making in this policy area. It is hypothesized that populists challenge the EU’s economic governance on three different accounts, based on populism as an ideology. First, they build a narrative which questions the legitimacy of EU-level decision-making, accusing it as being a technocratic argument which goes against ‘the will of the people’. Secondly, they challenge the institutional norms and processes constituting decisions on EU economic affairs, claiming that EU-level decisions suffer from a democratic deficit. Thirdly, they dispute the policies that are decided upon, arguing that they act against the concerns and interests of ‘the people’. Nevertheless, the paper also differentiates between specific policy questions, and argues that populist governments seem to be more successful in challenging EU-level decision-making whenever politicization costs little, while immediate impacts of non-decision are negligible. The paper looks at the cases of Italy and Hungary and their approach to the rule of law conditionality on the one hand, and the Resilience and Recovery Facility on the other hand. Overall, the paper points out that populism acts as a standalone variable of EU integration, and adds an additional layer of complexity to the already complex landscape of EU economic governance.