Rethinking investment behind the technocratic veil: The emerging consensus on investment and the new EU fiscal rules

Abstract The question of public investment has recently returned to the top of the EU policymaking agenda, signalling a shift away from austerity-era policies. Scholars have celebrated this renewed centrality of state investment as a kind of Keynesian revival, catalysed by the compounded crisis of the pandemic, climate change, and war. However, the specifics of this investment turn have seldom been analysed in any detail. We do so here using a critical lens, tracing the distributional and practical consequences of this turn in the evolution of EU governance over the past two decades. We argue that the particular investment paradigm which has emerged during this period favours supply-side interventions and sidelines alternatives within the framework of a discourse based on a distinction between growth-enhancing investment and unproductive consumption spending. We highlight how this analytically weak distinction serves to legitimise a supply-side strategy that limits the potentially transformative role of the fiscal state. Our findings reveal how this narrow approach to investment limits the state’s role to one of a facilitator of private capital, operating within existing fiscal constraints.