Technocracy, supranationalism, and right-wing populism: the variegated sheltering of Western assets in East Central European countries

<p dir="ltr">After the Global Financial Crisis of 2008, EU governance has become more tolerant towards national policy adaptation and experimentation. Right-wing populist governments in East Central Europe have used this increased flexibility among other things to develop various economically nationalist strategies to reassert control over their economies, particularly by limiting the influence of foreign multinational corporations. They use a broad range of practices, such as special laws and regulations, ad hoc state interventions, or outright expropriation to mitigate the dominance of Foreign Direct Investment (FDI). By decreasing dependency on Western European companies, such economic nationalist strategies have the potential to rebalance the European Union’s economic structure. Yet, some of these practices may not breach the principle of the Rule of Law but may still clash with EU competition- and common market law. The purpose of this paper is to explore and explain the limits of EU regulatory flexibility and tolerance towards policy divergence in member states. We find that institutional constraints leading to different degrees of isolation of EU institutions from member state preferences play a crucial role in explaining when and who among EU institutions becomes active in defense of Western FDI in ECE countries under rightwing populist rule We conclude by discussing normative implications for the debate about the EU’s democratic deficit(s) and venues for future research.</p>