Constructions and practices of democracy in national implementation of the European Semester

The European Semester has been criticized for the lack of democratic legitimacy. Constitutionalized fiscal rules and increased scrutiny by the Commission constrain national policy options, the process is dominated by national and EU-level technocrats rather than elected politicians, and economic actors hold the pen at the expense of social actors. The limited, although increasing involvement of parliaments, and the limited possibilities of social partner and civil society involvement further undermine legitimacy. In many member states, the Semester hardly surfaces in public and political debates. Early research on the embedding of the Recovery and Resilience Facility in the Semester suggests some shifts in the balance of economic and social actors, the Commission and the member states, but more research on the effects of the pandemic and the RRF on the processes, practices and interactions related to the Semester at different levels is needed. This paper assesses the democratic weaknesses of the Semester and RRF-related shifts through using Finland as a country-case. Finland provides an interesting case to study the practices and interactions involved in the softer aspects of the Semester: Finland has not been subjected to the Excessive Debt Procedure since the early years of the Semester, and Finland has often seen as a model pupil of European integration eager to conform to EU-level rules. The paper looks at the democratic weaknesses of the Semester with a focus on the processes, practices and interactions between the Commission and the national level between member states in the Council, and between national-level actors. Building on interview data collected in 2019 and 2023, and drawing on new institutionalist theories and constructivism, it analyses constructions of key actors as well formal and informal institutions that can either increase or reduce transparency, openness, inclusion, and deliberation within the Semester. The research questions are: 1) How do the EU-level and national actors involved in Finland’s Semester-related processes construct them as democratic or non-democratic; 2) What formal and informal institutions shape power relations between actors, and the transparency, openness and inclusiveness of these processes; and 3) How have these constructions and practices changed due to Covid-19 and the RRF? Empirically, the paper provide new knowledge about the democratic character of the European Semester implementation. Theoretically, it aims to provide new inroads into theorizing formal and informal institutions as democratic or non-democratic.