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

Over a twelve months following the election that handed Donald Trump a decisive comeback victory, the Democratic party has yet to issued 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 failed to concentrate enough on tackling basic economic anxieties. By prioritising the menace to democracy that Trumpist populism represented, progressives neglected the kitchen-table concerns that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a tumultuous period of politics between now and the end of the decade, that is a lesson that must be fully understood in European capitals. The White House, as its recently published national security strategy indicates, is hopeful that “patriotic” parties in Europe will quickly replicate Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead 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 adequate to troubling times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are expensive and era-defining. They encompass the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a Brussels-based research institute, the new age of geopolitical insecurity could require an additional €250bn in annual EU defence spending. A major report last year on European economic competitiveness demanded substantial investment in public goods, to be partly funded by jointly held EU debt.

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

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

The Cost of Political Paralysis

The reality is that in the absence of such measures, the less well-off will bear the brunt of financial adjustment through austerity budgets and greater inequality. Acrimonious recent disputes over retirement reforms in both France and Germany highlight a growing battle over the future of the European welfare state – a trend 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 resisted moves to raise the retirement age and has said that it would target any benefit cuts at foreign residents.

Avoiding a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as subsequent Medicaid cuts and tax breaks for the wealthy demonstrated. But in the absence of a compelling progressive alternative from the Harris campaign, they proved effective on the campaign trail. Without a fundamental change in fiscal policy, societal agreements across the continent are in danger of being ripped up. Policymakers must avoid handing this electoral boon to the Trumpian forces already on the march in Europe.