Addressing the Continent's National Populists: Protecting the Vulnerable from the Winds of Transformation

Over a twelve months after the election that delivered Donald Trump a clear-cut comeback victory, the Democratic Party has still not released its election autopsy. But, recently, an prominent liberal advocacy organization released its own. Kamala Harris's campaign, its writers argued, did not resonate with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, progressives neglected the bread-and-butter issues 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 lesson that needs to be fully absorbed in Brussels, Paris and Berlin. The White House, as its newly released national security strategy indicates, is hopeful that “nationalist movements in Europe will quickly replicate 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 large swaths of working-class voters. Yet among establishment politicians and parties, it is hard to discern a response that is sufficient to troubling times.

Major Challenges and Costly Solutions

The issues Europe faces are costly and historic. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient to pressure by Mr Trump and China. According to a European thinktank, the new age of geopolitical insecurity could require an additional €250bn in annual EU defence spending. A major study last year on European economic competitiveness called for massive investment in public goods, to be partly funded 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 oppose the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are deeply unambitious. In France, the idea of a wealth tax is widely supported with voters. Yet the embattled centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Cost of Inaction

The truth is that in the absence of such measures, the less well-off will bear the brunt of financial adjustment through austerity budgets and increased inequality. Bitter recent disputes over pension cutbacks in both France and Germany highlight a developing struggle 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 said that it would focus any benefit cuts at non-French nationals.

Preventing a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were largely insincere, as subsequent Medicaid cuts and fiscal benefits for the wealthy demonstrated. But in the absence of a convincing progressive counteroffer from the Harris campaign, they proved effective on the election circuit. Without a fundamental change in fiscal policy, societal agreements across the continent risk being ripped up. Governments must steer clear of giving this political gift to the Trumpian forces already on the rise in Europe.