Unpacking the European Commission's fiscal policy response to crisis: mapping and explaining economic ideas in the European Semester 2011–2022

Abstract

In this paper, we examine how and why the European Commission's ideas on fiscal policy have changed over the course of the European Semester. Empirically, we rely on a semi-supervised scaling approach to identify economic ideas as they appear in Semester documents from the aftermath of the financial crisis onwards (2011-2022). Our findings demonstrate a gradual shift in ideas from an ordoliberal to a Keynesian direction, especially during the overlapping Von der Leyen and Covid-19 crisis years. We identify substantial country-specific differences throughout 2011–2022, with some countries receiving exclusively Keynesian recommendations, and others distinctively ordoliberal ones. These patterns can be explained in part by economic conditions in those member states but not by the public's trust in the EU. These results underscore the reactive nature of the Commission's economic ideology; crises, as well as member states’ economic conditions, shape the direction of its fiscal policy recommendations.