Crisis and paradigm change in the European semester: from austerity to investment-oriented policy ideas

Abstract

The policy-responses to the COVID-19 pandemic have fuelled expectations about potential paradigmatic change in European Economic Governance (EEG). Building on existing scholarship on policy paradigms, we develop testable expectations about the steps preceding paradigmatic change, which we explore on the basis of three types of data. First, we show how public spending in three key Eurozone countries between 2008 and 2021 follows predicted patterns of the punctuated equilibrium model. Second, we show that governments’ justifications for their annual budgets reflect a gradual change in policy-ideas between 2009 and 2020, following the expected three orders of change. Third, we show how this gradual change is also present in the European Country-Specific Recommendations and in the bureaucratic logics within the European Commission. Our findings reconcile three strands of scholarship on policy change and have implications for our understanding of the European integration process and for future research on economic policy-making within EEG.