Technocratic Keynesianism: a paradigm shift without legislative change

Despite anticipated curtailment of their powers, the past decade saw technocratic actors take on an increasingly powerful role in economic governance. Focusing on the EU, I analyse these epochal shifts as a move away from the market liberal paradigm that informed the 1992 European Economic and Monetary Union (EMU). The 1992 EMU combines a highly restrictive attitude to public money creation with a permissive laissez-faire attitude to private credit money. In the face of the dual crises of COVID-19 and the climate emergency, EU technocrats have abandoned key tenets of the EMU. The European Central Bank provides targeted and large-scale support for pandemic-related fiscal expenditures. Banking regulators and supervisors actively guide the allocation of credit with an eye to its economic and environmental impact. However, constitutional structures lag ideational shifts and the new technocracy is haunted by issues of legality and legitimacy. To pursue the new policies within the old constitutional structures, policymakers engage in strategic ambiguity: the policies are justified in terms of both new economic policy priorities, as well as by reference to the instruments and goals of the earlier market liberal paradigm.