The governance of the recovery and resilience facility: a critical political economy perspective

The Recovery and Resilience Facility (RRF) is the cornerstone of the NextGenerationEU, a stimulus package marking the shift of European governance towards expansionary policies and fiscal coordination. The instrument is temporary but with potentially lasting effects. This commentary highlights that a critical political economy (CPE) perspective allows us to consider the RRF not only as a governance innovation within the EU institutional architecture, but importantly as an instrument of state transformation. It is hardly up for debate that the RRF has been used to promote investments and reforms that were already on the EU agenda. However, I contend that such instrument and reforms actively transform the state more broadly, reconfiguring its relationship with the market, in a shift towards what scholars have called authoritarian neoliberalism. Against this background, four mechanisms are identified through which the RRF entailed state transformation at the transnational but importantly and interconnectedly at the member state level. I consider the RRF as a whole, but in terms of National Recovery and Resilience Plans (NRRP) I particularly draw on Italy, due to its NRRP being the largest in terms of resources allocated. The mechanisms are identified as: centralisation of the executive, legitimation through technocratic expertise rather than the parliamentary process, the creation of new institutions, and the content of specific policies carried out.