Limitations of coordinative Europeanisation in the Just Transition Mechanism in Romania

Abstract

The EU currently promotes a radical transition towards a green, digital and more inclusive economy, which for its realization relies on the European Investor State’s financial architecture. As the transition generates losers, not only winners, instruments like the Just Transition Mechanism (JTM) are designed to provide a compensatory function. However, our research shows that it might miss its mark of ‘leaving no one behind’. JTM is a fascinating extension of European Investor State as it seeks to service the losers through investments rather than compensations. Firstly, JTM mirrors the vision of the InvestEU program and doubles down on industrial transformation and strategic investments that rely substantially on private sector involvement. Secondly, as a process, the JTM requires local stakeholder coordination and national institutional capacity – both of which can pose additional challenges to newer member states without enhancing local capabilities. Thirdly, based on the process design, much like other EU programs, JTM has a level of complexity that leaves beneficiaries highly reliant on technical assistance. As such, investment gaps in the newer member states might be extended, and not compressed by the current compensatory financial tools of the EU. Using an in-depth case study method, we develop a multi-dimensional evaluation of the Just Transition process in the most affected region of the Jiu Valley in Romania. Through an original local stakeholder mapping, we find that while the local and national authorities have the highest influence in determining the Just Transition process in Romania, they are also very much distrusted by other local actors. Our findings reveal that it is not just the often-cited weakness in institutional capacity, but also that of poor stakeholder consensus that impede the strategic planning and implementation of new EU investment tools at the level of targeted beneficiaries.