Addressing the Continent's Populist Movements: Protecting the Less Well-Off from the Winds of Change

More than a twelve months after 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 published its own. Kamala Harris's campaign, its authors argued, did not resonate with key voter blocs because it failed to concentrate enough on tackling basic economic anxieties. By prioritising the menace to democracy that Maga authoritarianism represented, liberals overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Warning 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 absorbed in Brussels, Paris and Berlin. The White House, as its newly released national security strategy indicates, is optimistic that “patriotic” parties in Europe will soon 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, backed by significant segments of blue-collar voters. But among establishment politicians and parties, it is hard to discern a strategy that is adequate to challenging times.

Major Problems and Costly Solutions

The issues Europe faces are costly and historic. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to pressure by Mr Trump and China. According to a European research institute, the new age of global instability could require an additional €250bn in annual EU defence spending. A significant study last year on European economic competitiveness called for substantial investment in shared infrastructure, to be financed in part by jointly held EU debt.

Such a economic transformation would boost growth figures that have stagnated 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 oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are profoundly unambitious. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. Yet the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Inaction

The reality is that without such measures, the less affluent will bear the brunt of financial adjustment through austerity budgets and increased inequality. Acrimonious recent conflicts 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 welfare chauvinism. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has said that it would focus any benefit cuts at foreign residents.

Preventing a Political Gift for Nationalists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy demonstrated. But in the absence of a convincing progressive counteroffer from the Harris campaign, they worked on the campaign trail. Absent a radical shift in fiscal policy, societal agreements across the continent are in danger of being ripped up. Policymakers must avoid handing this electoral boon to the populist movements already on the march in Europe.