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

After the Global Financial Crisis of 2008, European Union (EU) governance has become more tolerant towards national policy adaptation and experimentation. Right-wing populist governments in East Central Europe (ECE) have used this increased flexibility amongst 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 EU'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 article 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 amongst EU institutions becomes active in defence of Western FDI in ECE countries under right-wing populist rule. We conclude by discussing normative implications for the debate about the EU's democratic deficit(s) and venues for future research.