Next generation EU and the future of economic governance: towards a paradigm change or just a big one-off?

Next Generation EU (NGEU), the new temporary program (2021-2026) decided by the European Union (EU) to deal with the economic consequences of the COVID-19 pandemic, represents a substantial break with respect to previous EU responses to economic crises. After identifying the discontinuity introduced by the NGEU compared to the governance response to the sovereign debt crisis of the early 2010s, the paper investigates the conditions under which a new paradigm of economic governance would emerge and not remain simply a major one-off, when the EU should deal with an exogenous shock. Those conditions are conceptualised in terms of three trilemmas. The possibility of the NGEU becoming the harbinger of a new paradigm of economic governance will depend on the solutions of those trilemmas – favouring the EU supranational institutions, promoting a new policy mix in fiscal policy, and implementing national reforms coherent with the EU's aims notwithstanding national electoral cycles. The solutions are then evaluated according to the "Monnet Compatibility Test" (MCT) which implies coherence between the institutional, economic and political features of the new economic governance arrangements.