The Implications of Governance Differentiation inthe EU: Comparing the Sovereign Debt and the Pandemic Crises

The mainstream literature on differentiated integration (DI) has underestimated governance differentiation (the institutionalisation of two distinct decision-making regimes, supranational and intergovernmental), focusing only on policy differentiation. Consequently, it has not analytically considered the domination effects of the intergovernmental governance of core state power policies (as budgetary and fiscal policies), where the European Council enjoys a decision-making centrality. Comparing the outcome of two existential crises, the sovereign debt crisis of the early 2010s, and the economic consequences of the COVID-19 pandemic crisis of the early 2020s, the chapter shows how the European Council had to move from an “unconstrained intergovernmental” to a “constrained supranational” approach, exactly for neutralising the domination implications of intergovernmentalism, and the populist reaction to them. A governance system controlled exclusively by national governmental leaders cannot structurally meet the promise to guarantee equality among its Member States as celebrated by the EU Treaties. Not only in Brussels, but also in the mainstream literature on DI, there is too much complacency with the status quo.