Facing security threats and rising populism, Europe needs state investment in citizens, not austerity that fuelled discontent.
Europe stands at a pivotal juncture. The continent faces a challenging security environment that demands substantial investment, just as persistently weak growth threatens to become a structural issue. At the same time, European governments find their capacity to act increasingly constrained, as political fragmentation and instability, exacerbated by the rise of populist movements, undermine effective governance.
In response, some governments may be tempted to resort to spending cuts. The recent austerity measures introduced by the Starmer government in the UK, or Germany’s push to boost security budgets, without similar investment in essential public services like healthcare and social support, illustrates this trend. Such an approach, however, would be misguided. It misinterprets the lessons of the past decade’s populist surge. The rise of populism was driven not just by economic hardship or cultural anxiety, but by something deeper: a widespread perception that the state had abandoned ordinary citizens and a sentiment that mainstream political parties were complicit.
To rebuild public trust, governments should not further weaken the state but instead focus on making it work better: reducing bureaucratic inefficiencies, improving service delivery, and reinforcing confidence in public institutions. Populism is the narcotic of our time, a powerful, intoxicating force that numbs a widespread sense of abandonment without addressing its root causes. It offers a fleeting sense of empowerment and belonging, channelling frustration into rage against elites and outsiders. Yet, like any narcotic, it merely masks the deeper pain: the vanishing jobs, eroded social ties, and dislocated places that made communities vulnerable to discontent in the first place. Populism sedates the discontent, but usually fails to provide solutions to heal it.
The fact that populism responds to grievances but rarely solves them presents a critical opportunity for mainstream political forces to reclaim voters. The first step is to recognise the legitimate grievances that populism exploits, particularly the sense of betrayal stemming from economic policies like austerity. Studies by economists have shown how austerity measures directly fuelled support for Brexit, while research by political scientists reveals how cuts to public services bolstered far-right movements. Disillusioned by their experiences with government, voters abandoned the parties they held responsible for its failures. Other studies reveal how concerns about housing and soaring rents have stoked political discontent, while dwindling access to healthcare (often manifested in GP closures and lengthening hospital wait times) has deepened grievances, amplifying the appeal of populist rhetoric.
To counter the populist tide, mainstream politicians must revitalise the social contract by proving that the state can once again be a force for good. This means investing in public service delivery, allowing houses to be built, and reducing administrative burdens for citizens trying to access the state. Only by making government work for the people can mainstream forces regain people’s trust and demonstrate that the state matters for society. This makes it worthwhile to pay taxes. By doing so, mainstream political forces offer more than just rhetoric. They put their money where their mouth is to rebuild trust and show that they genuinely understand the government failures that have driven voters into the arms of populists.
Policies after the financial crisis in many European countries were focused on cutbacks and the privatisation of public space. This has contributed to a decline in political trust, a sense of unfairness, and tribal prosperity based on a “us-first” mentality. With this, the state not only loses its purpose but also its ethical dimension. The quality of public space and public relations do not arise spontaneously; one has to invest in them. For this, public services have to be maintained, giving citizenship a tangible form. In this pivotal point in our history, where the security of the European continent is threatened, let mainstream political forces use this time to reinvigorate the state, not only through defence but by reinvigorating Europe-style social capitalism through a new social contract.
Europe’s security strategy must be holistic and multidimensional, encompassing more than just defence. While recent efforts have rightly focused on mitigating risks, this narrow approach risks overlooking the importance of economic security. As economic security underpins hard security, the strategy should prioritise innovation, international collaboration, and robust economic policies that allow countries to have the fiscal space to invest in their citizens. Integrating security into all policy areas is essential, but we should avoid falling into the pitfall of choosing between warfare and welfare. Only by adopting a comprehensive, 360-degree approach can Europe safeguard its strategic interests in an increasingly complex global landscape.
As Franklin D. Roosevelt noted in 1944, “True individual freedom cannot exist without economic security and independence. Necessitous men are not free men.” Shrinking the European social model will sting a continent already bruised by public underinvestment and flailing public services, and doing so could kill Europe’s security efforts at the ballot box.
Catherine de Vries holds the Generali Endowed Chair in European Policies and is a Professor of Political Science at Bocconi University. She also serves as President of the Institute of European Policy Making at Bocconi University and is co-chair Bocconi’s International Advisory Council.