Five 'Big Ideas' for turning the tables on Europe's populists

This year is billed as a make-or-break time for the European Union. That’s true in the sense that a surge of protest votes for populists would deal a grievous blow to the faltering project of European integration. Yet such hotly disputed issues as migration and eurozone reform should be set against far darker shadows over Europe’s future.
Demographic shifts and structural economic weaknesses are our greatest threats but are barely discussed. Here’s a checklist of five major issues that should, but won’t, feature in campaigning for the European elections in late May. These are long-term handicaps that will shape mid-21st century Europe, and future generations will have to pay for our neglect of them.

1. Europe’s ageing population is growing fast, and that’s already raising divisive choices over social benefits for the poor, the jobless or the retired. The EU institutions should be playing a central role in defining and highlighting these competing needs, but so far they’ve been inexcusably silent.

2. Shrinking workforces in most EU countries may mean lower unemployment figures, but also smaller tax receipts and increased inter-generational competition for welfare and social benefits. That’s why immigration and taxation cannot be viewed only through national prisms. Again, the EU has lacked the courage to advance new ideas.

3. No one can be sure how EU governments should balance the conflicting needs of older people with those of already under-privileged younger generations. This problem is aggravated by technological upheavals affecting tax yields and labour markets. The greatest danger is that of a ‘race to the bottom’ between EU member states attempting to increase their own tax receipts at the expense of others.

4. The costs of ageing – pensions, healthcare and of bringing in more immigrants – make radical reform of 20th-century tax practices inevitable. The EU has made only negligible efforts to promote a discussion. Taxing Internet giants would demand a concerted cross-border approach, but fiscal policies are the jealously guarded prerogative of the EU’s national governments. It’s high time this was challenged.

5. Even more daunting than these tough economic issues is the possibly insoluble democratic question. Europe’s snowballing elderly population will ensure that younger voters are in a minority for generations to come. By 2080, almost a third of the European electorate will be over 65. The IMF calculates that the median wealth of today’s disadvantaged younger Europeans is only a tenth of that of the over-65s, and that pattern is sure to be defended by older voters. Talk of “inter-generational conflict” is no longer far-fetched.

The main reason these tectonic political challenges aren’t campaign issues is that they are so long-term. They are also being avoided by mainstream politicians because they would seem to provide ammunition for populists who thrive on Europe’s apparent shortcomings.

Fear of humiliation at the polls is thus making candidates from both the socialist and conservative groupings that dominate the European Parliament wary of advancing ‘Big Ideas’. However, avoiding Europe’s fundamental problems is a big mistake. From Scandinavia through central Europe to Italy and Greece, the populist parties that have altered the EU’s political landscape have also shown themselves bereft of policy solutions.

By highlighting the pressures weighing inexorably on Europe’s higher living standards, the mainstream parties would showcase their policymaking strengths. Rather than ignoring the way demographic change heralds social upheaval, mainstream politicians should debate possible solutions and thus reveal the populists’ lack of vision.
Whatever this year’s European elections may deliver, Europe’s looming structural challenges call for revolutionary thinking. Along with the new intake of MEPs, would-be Commissioners should be required to set out their ideas for tackling these huge social and economic shifts with the sort of far-sighted EU strategy that so far has been dismally absent.