Combating the Continent's Populist Movements: Shielding the Vulnerable from the Winds of Transformation

More than a twelve months after the vote that delivered Donald Trump a decisive comeback victory, the Democratic Party has yet to issued its election autopsy. However, last week, an prominent liberal advocacy organization released its own. The Harris campaign, its writers argued, failed to connect with core constituencies because it did not focus enough on addressing basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, liberals overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for Europe

While Europe prepares for a turbulent era of politics from now until the end of the decade, that is a message that must be fully understood in European capitals. The White House, as its newly released national security strategy makes clear, is optimistic that “patriotic” parties in Europe will quickly mirror Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of blue-collar voters. But among mainstream leaders and parties, it is difficult to see a response that is adequate to challenging times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are costly and era-defining. They include the war in Ukraine, sustaining 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 Brussels-based 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 massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

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

However, 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 EU spending plans for the next seven years are profoundly timid. In France, the idea of a wealth tax is widely supported with voters. But the embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The truth is that in the absence of such measures, the less affluent will pay the price of financial adjustment through spending cuts and greater inequality. Bitter recent conflicts 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 welfare chauvinism. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has stated that it would focus any benefit cuts at non-French nationals.

Preventing a Strategic Advantage for Nationalists

In the US, Mr Trump’s promises to protect blue‑collar interests were largely insincere, as later healthcare reductions and tax breaks for the wealthy demonstrated. Yet in the absence of a convincing progressive counteroffer from the Harris campaign, they proved effective on the election circuit. Without a radical shift in economic approach, social contracts across the continent risk being ripped up. Policymakers must avoid handing this electoral boon to the populist movements already on the march in Europe.