Combating the Continent's National Populists: Protecting the Less Well-Off from the Winds of Transformation

More than a year after the vote that handed Donald Trump a clear-cut comeback victory, the Democratic party has still not issued its postmortem analysis. However, recently, an influential progressive lobby group released its own. Kamala Harris's campaign, its writers contended, did not resonate with core constituencies because it failed to concentrate enough on addressing everyday financial worries. In focusing on the threat to democracy that Maga authoritarianism represented, liberals overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for European Capitals

While Europe prepares for a tumultuous period of politics from now until the end of the decade, that is a message that must be fully understood in Brussels, Paris and Berlin. The White House, as its recently published 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) lead the polls, supported by significant segments of working-class voters. But among establishment politicians 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, addressing demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. According to a European thinktank, the new age of geopolitical insecurity could necessitate an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness demanded massive investment in shared infrastructure, to be financed in part by collective EU debt.

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

However, 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 resist the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are deeply timid. In France, the idea of a tax on the super-rich is widely supported with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Inaction

The reality is that without such measures, the less well-off will bear the brunt of fiscal tightening through spending cuts and increased inequality. Bitter recent disputes over pension cutbacks in both France and Germany testify to 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 stated that it would focus any benefit cuts at foreign residents.

Preventing a Political Gift for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as later Medicaid cuts and fiscal benefits for the wealthy underlined. Yet in the absence of a compelling progressive counteroffer from the Harris campaign, they worked on the campaign trail. Without a fundamental change in fiscal policy, social contracts across the continent are in danger of being torn apart. Policymakers must steer clear of giving this electoral boon to the Trumpian forces already on the march in Europe.