What Happens with EU Money? The Governance and Control Systems Set up in Italy and Greece to Implement the National Recovery and Resilience Plans

This article deals with the governance and control systems (GCS) established by European Union (EU) member states to manage the resources obtained from the Recovery and Resilience Facility (RRF). By GCS we mean the institutions, actors, structures, and processes at the national level who decide on what EU resources are spent, who perform the daily management of EU money, and who control this money against misuse. This is a crucial topic because as EU money belongs to all European taxpayers, it is important to know how member states manage it. The EU is not a state, it is not allowed to unconditionally transfer common resources to the member states, and some countries strongly oppose the development of a European ‘transfer union’. The article considers the largest transfer of European money in the history of the EU, the RRF. It has three aims: 1) to describe the constitutive elements of member states’ GCS of the RRF money in order to create typologies); 2) to understand to what extent member states developed a similar GCS (institutional isomorphism); and 3) to explain why member states set up a specific GCS. For national governments, EU money is attractive because it helps them financing domestic investments and reforms. Hence, they want to retain full control over the management of EU money. Yet, the EU institutions and the other member states have an interest in controlling how EU money is managed and spent because it is ‘their’ money. The article examines this political tension by shedding light on the interplay between (perceived) pressure (hard or soft) from the EU (Europeanization) and domestic preferences (domestication) in the establishment of the GCS of the RRF money. It considers two high beneficiaries of RRF money with a traditionally problematic absorption capacity of EU cohesion funds—Italy and Greece. It adopts qualitative content analysis, causal process tracing and semi-structured interviews. The three aims of the article allow to assess if the post-pandemic EU has moved towards a fiscal union, i.e. a system where the central level (the EU) can collect a significant amount of truly own revenues and directly spend these resources on public goods, or transfer them to the constituent units the member states) which have similar institutional arrangements to manage the money coming from the EU.