Combating Europe's National Populists: Shielding the Less Well-Off from the Winds of Transformation

More than a twelve months after the election that delivered Donald Trump a decisive comeback victory, the Democratic party has yet to released its election autopsy. But, recently, an influential progressive lobby group published its own. The Harris campaign, its authors argued, failed to connect 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 bread-and-butter issues that were foremost in many people’s minds.

A Warning 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 European capitals. The White House, as its newly released national security strategy makes clear, is hopeful that “patriotic” parties 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, supported by significant segments of working-class voters. But among mainstream leaders and parties, it is hard to discern a response that is sufficient to challenging times.

Major Problems and Costly Solutions

The issues Europe faces are costly and historic. They encompass the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and developing economies that are less vulnerable to pressure by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity 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 fiscal paradigm shift would stimulate 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 deeply timid. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Cost of Political Paralysis

The reality is that without such measures, the less well-off will pay the price of fiscal tightening 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 welfare state – 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 resisted moves to raise the retirement age and has said that it would target any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were deeply disingenuous, as later healthcare reductions and tax breaks for the wealthy underlined. But without a convincing progressive alternative from the Harris campaign, they worked on the campaign trail. Without a fundamental change in fiscal policy, societal agreements across the continent risk being torn apart. Policymakers must steer clear of giving this electoral boon to the Trumpian forces already on the rise in Europe.