Addressing Europe's Populist Movements: Protecting the Less Well-Off from the Forces of Transformation

More than a year following the vote that delivered Donald Trump a clear-cut comeback victory, the Democratic Party has yet to released its postmortem analysis. But, last week, an prominent liberal advocacy organization released its own. The Harris campaign, its authors argued, failed to connect with key voter blocs because it did not focus enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, progressives neglected the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for Europe

While Europe prepares for a turbulent era of politics from now until the end of the decade, that is a message that needs to be fully understood in Brussels, Paris and Berlin. The White House, as its recently published national security strategy makes clear, is hopeful that “patriotic” parties in Europe will quickly mirror Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, supported by large swaths of blue-collar voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is sufficient to troubling times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are costly and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient to bullying by Mr Trump and China. According to a European research institute, the new age of global instability could necessitate an additional €250bn in annual EU defence spending. A major study last year on European economic competitiveness demanded massive investment in shared infrastructure, to be financed in part by collective EU debt.

Such a economic transformation would boost growth figures that have flatlined for years.

However, at both the pan-European and national levels, there continues to be a lack of boldness when it comes to generating funds. The EU’s so-called “frugal” nations resist the idea of shared debt, and EU spending plans for the next seven years are profoundly unambitious. In France, the idea of a wealth tax is widely supported with voters. Yet the beleaguered centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Price of Political Paralysis

The truth is that without such measures, the less well-off will pay the price of financial adjustment through austerity budgets and greater inequality. Bitter recent conflicts over retirement reforms in both France and Germany testify to a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have eagerly leveraged to promote a politics of nativist social policy. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has stated that it would focus any benefit cuts at non-French nationals.

Preventing a Political Gift for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as subsequent Medicaid cuts and tax breaks for the wealthy underlined. But in the absence of a convincing progressive counteroffer from the Harris campaign, they proved effective on the election circuit. Absent a radical shift in economic approach, social contracts across the continent are in danger of being torn apart. Policymakers must avoid giving this political gift to the populist movements already on the march in Europe.