ABSTRACT
In 2020, in response to the COVID-19 pandemic, the Recovery and Resilience Facility (RRF) was adopted. It implied the establishment of a significant EU-level fiscal capacity which was, in governance terms, articulated with the preexisting European Semester. This chapter explores the interplay between this governance innovation and its effects on EU-induced social policy reforms. In particular, it assesses whether, through the implementation of the RRF, the EU’s approach to social and employment policy reform experienced a transformation away from the neoliberal recipes that dominated the management of the euro crisis, towards the development of a new policy paradigm. To do so, it studies the post-2020 policy reform trajectories and the social policy paradigms informing the National Recovery and Resilience Plans of Italy and Spain, the two largest beneficiaries of RRF funding. Informed by the social investment paradigm that the EU has been promoting since 2013, the two plans share a focus on addressing long-standing social challenges mainly by supporting productive social reforms. Combining funding with targets and milestones to be fulfilled proved effective in promoting policy change in both countries, but it also fuelled resistances on the part of some subnational actors that may hamper effective implementation.
