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

Over a twelve months following the vote that handed Donald Trump a decisive return victory, the Democratic Party has still not issued its election autopsy. However, recently, an influential liberal advocacy organization released its own. Kamala Harris's campaign, its writers argued, failed to connect with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. By prioritising the threat to democracy that Maga authoritarianism represented, liberals neglected the kitchen-table concerns that were foremost in many people’s minds.

A Warning for European Capitals

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a lesson that needs to be fully absorbed in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is hopeful that “nationalist movements in Europe will soon mirror Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by significant segments of blue-collar voters. But among mainstream leaders and parties, it is hard to discern a response that is sufficient to challenging times.

Era-Defining Problems and Expensive Solutions

The issues Europe faces are expensive and historic. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are more resilient to bullying by Mr Trump and China. As per a European thinktank, the new age of global instability could require an additional €250bn in annual EU defence spending. A major study last year on European economic competitiveness demanded massive investment in public goods, to be financed in part by jointly held EU debt.

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

But, at both the EU-wide and national levels, there continues to be a deficit of courage when it comes to generating funds. The EU’s so-called “budget hawks oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are deeply unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. But the beleaguered centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Cost of Political Paralysis

The truth is that in the absence of such measures, the less affluent will bear the brunt of financial adjustment through spending cuts and greater inequality. Bitter recent disputes over pension cutbacks in both France and Germany highlight a developing struggle over the future of the European social model – 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 stated that it would target any benefit cuts at non-French nationals.

Avoiding a Political Gift for Populists

In the US, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as subsequent healthcare reductions and tax breaks for the wealthy demonstrated. Yet in the absence of a convincing 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 risk being ripped up. Governments must avoid handing this political gift to the Trumpian forces already on the rise in Europe.