Addressing the Continent's National Populists: Shielding the Less Well-Off from the Forces of Transformation

Over a twelve months following the election that delivered Donald Trump a clear-cut comeback victory, the Democratic Party has still not released its election autopsy. But, last week, an influential liberal advocacy organization published its own. The Harris campaign, its writers contended, did not resonate with key voter blocs because it did not focus enough on tackling basic economic anxieties. By prioritising the menace to democracy that Trumpist populism represented, liberals overlooked the kitchen-table concerns that were uppermost in many people’s minds.

A Lesson for European Capitals

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 recently published national security strategy indicates, is hopeful that “nationalist movements in Europe will quickly mirror Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of working-class voters. Yet among mainstream leaders and parties, it is hard to discern a response that is adequate to troubling times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are costly and era-defining. They encompass the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and developing economies that are less vulnerable to bullying by Mr Trump and China. According to a European 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 massive investment in public goods, to be financed in part by jointly held EU debt.

Such a fiscal paradigm shift would stimulate growth figures that have flatlined for years.

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

The Price of Political Paralysis

The reality is that without such measures, the less well-off will pay the price of financial adjustment through austerity budgets and greater inequality. Bitter recent disputes over retirement reforms in both France and Germany testify to a growing battle over the future of the European social model – 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 said that it would focus any benefit cuts at foreign residents.

Preventing a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. Yet without a compelling progressive counteroffer from the Harris campaign, they worked on the election circuit. Absent a radical shift in economic approach, societal agreements across the continent risk being ripped up. Policymakers must steer clear of giving this electoral boon to the Trumpian forces already on the march in Europe.