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Trump and the next phase of European integration

Once is an accident, twice the new normal. 

With his electoral success Donald Trump is the new reality in the United States, not just an aberration. Donald Trump obviously embraces his time better than anybody else, which ensured him a comeback as President of the United States of America elected by the people against seemingly overwhelming legal and political resistance. He is the new rule of the game, like it or not.

The revolt of the lower middle class

What is that new reality?

The party political system in the United States of America and Europe is fundamentally transformed by the revolt of the lower middle class.

Voter analysis gives a clear picture: Marine Le Pen and the Rassemblement National represent like no other French party the “defavorise” and have replaced in that function the traditional left. She is successful in the former Communist heartland and mining territory of northern France where she also assures her own seat in parliament. The AFD in Germany is electorally over-represented with workers and the unemployed and those with below the average income and education. The FPO in Austria rallies the workers.

This should not have come as a big surprise. Right wing populist parties are recognised in science as unconventional workers parties for already more than a decade. And the transformation of the political space in Europe is ongoing for already more than a decade as well. 

European Parliament elections are an excellent monitor of the overall situation in Europe and the member states. The 2024 European Parliament elections show us a political space that is basically divided in three. One third of the members sitting on the left organised in the green, socialist and left group, a good third in the centre embracing the liberals and the Christian democrat European Peoples Party and a small third now on the populist and radical right.

Donald Trump’s success was assured already in 2016 through gains in the rustbelt states, formerly Democrat Party heartland. Joe Biden with his credibility among workers acquired over decades through close cooperation with the trade unions could in 2020 narrowly turn the tide. Joe Biden could achieve what presidential candidates from liberal New York and California Hillary Clinton and Kamala Harris could not.

The Republican party today is the MAGA party. The Republican party today is the party of Donald Trump. The Republican Party of Ronald Reagan and George Bush does not exist anymore. The Republican party was the party of the highly skilled. The Republican Party today represents and owes its electoral success to the lower skilled and working class. National security Republicans have lost their political home.

Why is the lower middle class revolting?

The lower middle class can be identified as the political space whose economic situation is tense. In other words: they have no financial buffer. Anything happening can push them over the edge. In the United States, this group is called “from paycheck to pay-check” and considered to comprise about 20% of the population. Any Paycheck not arriving might force them to sell their car, several paychecks not arriving might oblige them to sell their house.

Ever since the financial crisis starting in 2008 we have gone in Europe from crisis to crisis. The drawn out financial crisis was followed by uncontrolled migration as a consequence of Russia’s bombardment of big cities in Syria, followed by Covid and then Russia’s aggression against Ukraine, causing major spikes in energy and food prices and another massive wave of migration. What can be weathered by the better off is an existential challenge for the lower middle class.

And if you are not already in the housing market by the luck of birth, it is increasingly difficult to get into. The social elevator is stuttering.

What we call “crisis” might equally be considered as a lack in performance of the system overall and an indication of increasing loss of control. Russia is aggressing militarily and beyond because they believe they can and get away with it. External borders prove time and time again to be porous. The German trend-line of growth starting at about 5% on average per year after the Second World War has now reached 0% or even less in the last five years.

Migration is perceived by the upper middle class as a promise of affordable personal services today and care in old age later, but as competition for affordable housing and state services by the lower middle class and the risk of decreasing educational standards for children in their lower income living areas.

German sociologist Andreas Reckwitz describes the experience of the lower middle class as one of a double denigration: economically and culturally. Economically, because formerly well paid industrial workers are falling increasingly behind the new university educated service class. Culturally, because their system of traditional values is regarded as outdated and to be overcome.

From a horizontal to a vertical party political system

The traditional horizontal classification of parties on a left to right axis is heavily misleading now. To understand what is happening, we need to replace the traditional horizontal system by a vertical one according to social status, income and education.

On the basis of the 2021 German federal election and data provided by Bundestag.de and others we can reconstruct such a vertical system.

Greens and liberals represent younger voters, with a very good income in case of the liberals and an average income, but outstanding level of education when it comes to the greens, the new party of the “Bildungsbürgertum”. They can together be considered the upper middle class and most dynamic part of society.

The traditional Peoples Parties, the Christian Democrats and the Social Democrats, are both the more popular the older the population, skyrocketing among those above 70 years old. Income levels are average. Their electorate is average educated and shrinking. They represent the middle class.

The left party is over-represented among academics and unemployed. Its electorate is earning below average. The extreme right AFD is over represented among workers and unemployed and people of working age. Educational levels are low. Household income is below average. The left and the AFD represent the lower middle class.

This lower middle class represented by the populist right is being promised protection by closure. Right wing populism is social nationalism.

But it is not all about program. Bringing that new coalition together is facilitated by charismatic leadership. Donald Trump is a charismatic leader in the sense of Max Weber. He finds his European equivalents in the likes of Nigel Farage, Boris Johnson, Marine Le Pen, and Viktor Orban.

The dominance of social media over the traditional media has dramatically decreased the cost of political organisation and provided a chance for newcomers to establish themselves. Social media have normalised hate, which was banned from the traditional media after the experience of racism, national socialism and communism for very good reasons. Political parties based on portraying an enemy in the tradition of Carl Schmitt are above average profiting from that.

What differentiates Europe from the United States?

What differentiates party political competition in Europe and the US?

If we are observing a revolt of the lower middle class similarly in both the United States and Europe, why is the impact so different up to now?

In the United States of America, the first passed the post system forces everybody to integrate into one of the two major political parties, the Democrats and the Republicans. Both parties therefore represent very large coalitions, which essentially serve an electoral purpose only and cannot be considered program parties. The fight for content takes place mainly inside among the different caucuses organised in Congress.

What you would find in the European Parliament in the European Peoples Party, the European Conservatives and Reformists, the Patriots and the Sovereignists, is all assembled in one political family, the Republicans. Equally what you find in the liberal Renew group, the Socialists and Democrats, the Greens and the Left in Europe has to cohabitate in the Democrat party in the United States.

The Republican party can be understood as a broad political coalition which has effectively fallen under the control and leadership of what in Europe might rather be considered the line of Viktor Orban and the Patriots. The other tendencies are still there, but marginalised. They can no longer determine the overall direction, but might still be sufficiently strong in Congress to block decision-making or line up with the other side when they regard policies as directed against their core convictions like unsustainable debt levels or on national security and defence.

European states are not immune either. The British, the French and the Hungarian specific electoral systems provide an oversized seat result for the relatively strongest party giving objectively nowadays increased opportunities for the extremes. Brexit can be considered as one outcome of this already, the current political stalemate in France, where the extreme right and the extreme left are holding the system hostage, as another.

In pure systems of proportional representation on the contrary you need more than 50% for one party or a coalition of several parties to take effective political control. In a first past the post system like the US 20-30% of the electorate is more than sufficient to take over one of the major political parties and with that to potentially run the country. Pure systems of proportional representation therefore provide a better protection against a right wing or left wing populist takeover.

And in the European Union?

On the federal level of the European Union on the other hand, the incentives are there for cooperation across the political Centre. Decisions in the Council need an oversized qualified majority, the election of a European Commission president by the European Parliament the absolute majority of the number of members elected to the house. These majorities can regularly be found only through cooperation across the aisle and transcending the traditional left right schism.

Willingness to hold important political office in the European Union therefore needs the readiness to compromise and forces also political parties more to the right and to the left to look towards the centre. The final vote on the Von der Leyen commission was carried by a large cross-cutting alliance of the Christian Democrat European Peoples party, the liberal Renew and the socialists, complemented by the constructive right around Italian Prime Minister Giorgia Meloni and the constructive left led by the German greens, while more radical elements of both the ECR and the green groups opposed.

The institutional system has a strong impact on the political culture in the European Union which is a culture of cooperation. The political system favours the creation of unity as the stability condition on a historically, geographically and culturally divided continent and therefore the centre.

The absence of permanent coalitions and lack of fixed roles of majority and minority in the division of power system of the European Union creates the opportunity of integrating those on the very right and very left who are not opposed to the system as such and whose primary aim is not to destroy it: the constructive right and the constructive left. Contrary to the United States where the destructive and anti-system element can dominate the other parts of their coalition, inside the European Union that destructive right and left finds itself isolated unless it stops being system opposition.

That is why Ursula von der Leyen was well advised to integrate Raffaele Fitto from Fratelli d’Italia as Vice President of the European Commission and at the same time continue a constructive dialogue with the co-leader of the green group Terry Reincke on the importance of climate change policies and actions to preserve the rule of law. Fratelli d’Italia had not only supported the new asylum pact contrary to Viktor Oban, but also supported Ukraine in a steadfast fashion including the most recent vote to make Ukraine profit from the interests of Russian assets. Fratelli d’Italia is part of the constructive right stabilising the political system of the European Union.

Is the European Union therefore safe? The European Union is a federal union of citizens and states and therefore dependent on the support in each and every of its member states. It is only as strong as its weakest link. Even though on average support is close to historical highs and clearly above the support levels of national institutions, that is not enough. Before Brexit, it’s weakest link in terms of overall support was the United Kingdom. Nowadays its weakest link is France, paralysed by the combination of a destructive right and the socialists and greens held hostage by the destructive left of La France Insoumise. And both extremes are cooperating in the destabilisation of the state. That smells like Weimar.

What needs to be done?

An agenda for strength

In the worlds of Donald Trump, Wladimir Putin and Xi jin Ping strength is the only thing that counts. Internationally and geopolitically we are back in a world of 19th century power politics. The rules of the game have changed and the quicker we understand this the better. 

We are threatened at the same time from the inside and from the outside. From the inside by the destructive nationalist populist right and left that try to hollow out the political order as established after 1945 based on parliamentary democracy, the rule of law and european integration. From the outside by agressive nationalist power politics. And more often than not these two are connected. The seatbelts need to be fastened.

Defending ourselves inside and outside has to start with the recognition that we are confronted with real issues, not just imagined ones. Hyper-inflation was real and is still stored in todays price levels. The accumulated inflation during Joe Bidens 4 year term was above 20% and will not be very different in Europe. Growth rates are very low, while debt is rising and with it the difficulty of the states to intervene in times of absolute need. Uncontrolled mass immigration happened. Our capacity to defend our continent is seriously compromised. 

International respect comes from strength, not from weakness.

This is not a case for mass psychotherapy, but political action. The political agenda has to change.

The European Parliament nowadays plays a key role in setting the agenda for the upcoming legislative term. Ursula von der Leyen had to negotiate with all political forces of good will on the program for the next 5 years to have any chance to get elected by an absolute majority of members of the house. 

That changes also the role of European political foundations. The Martens Center has contributed hundreds of precise policy proposals to the reflection in a number of documents entitled „The 7 D‘s for sustainability“, centered around defence, debt, digital, demography, democracy, de-carbonisation and de-risking globalisation to enrich the debate and help set a new agenda.

The outcome of the European elections matter as they should. With the Greens and the Liberals having lost together more than 50 seats and the so called progressive majority between Liberals, Greens, Socialists and the very Left gone, European Commission priorities for this legislature have markedly changed. Competitiveness and security comprising both defence and migration including border protection have moved as number one and two priorities to center stage.

This is underpinned by a different composition of the European Commission and the Council. With half of the Commissioners and the members of the European Council emanating from the European People‘s Party and the EPP occupying the center space in the European Parliament as well, concerns about competitiveness, migration and defence that are critical to strengthen our continent challenged from the inside and from the outside now have a stronger voice.

Implementing the Draghi report

Like every other policy paper the Letta as well as the Draghi report can and will be discussed in detail. Nobody nevertheless can dispute the competence of Mario Draghi in matters monetary and economic. The Draghi report will therefore provide a most important reference point. His report comprises 6 basic truths that will inspire the legislative proposals of the European Commission in this term, even more so as it was requested by the European Commission President herself. Draghi puts everybody in front of his or her own responsibility and can be understood in my personal reading in a nutshell as follows:

• Investment is the pre-condition for future growth. Europe is lagging behind in high tech investment and has largely lost the new digital economy. This can be identified as the key reason for the difference in per capita growth between the US and the EU. Mid tech based industry like the car industry that provides our current economic backbone is coming under increasing competitive pressure from China.
• Without that investment annual productivity growth falls behind. Europe could keep and develop its living standard largely by considerably increasing female and older age participation in the work place. Worsening demographics make that quantitative input increase more difficult.
• The European Union has to return to the strategy of scaling through the development of its own internal market especially in the less integrated areas of the service sector.
• Banking Union and Capital Markets Union are critical to accompany high tech investors in their efforts to scale beyond national boundaries. Given that high tech means not only high return, but also high risk, venture capital is necessary to accompany that growth.
• We have regulated for risk and not for opportunity, typical for aging societies. The regulatory burden has to be reduced.
• Common public debt has to come in as a residual answer, dependent in volume on the progress in the above mentioned. Consensus on common European debt could be achieved in the area of defence, which can be considered a European public good. A common European financing will also contribute to a more equal burden sharing.

On that basis the Martens Centre will with the help of internationally renowned economists provide precise policy recommendations to contribute to the debate.

Migration

Migration is at the core of right wing populist party growth. It brings together at the same time social and cultural challenges: social challenges in the form of competition for scarce public services and support, cultural as a challenge to traditional constructions of national and cultural identity.

Here society falls apart. What is the promise of improved personal services for the upper middle class and the liberal and green parties representing them, is the threat of lower salaries and increased competition for state services including education for the lower middle class.

Experience during negotiations for the current Swedish and Finnish governments showed, that a tough policy on migration was the one area where populist parties were not ready to adapt or compromise. Preliminary voting analysis from the European Parliament demonstrates that while right wing populist parties hold widely divergent views on economics from libertarian to state interventionists, they are highly united on the cultural axis of the political divide.

We have experienced in practice a radicalisation of our political space following events of mass migration both in the Mediterranean as well as following Russia’s agression in Syria and Ukraine. Russia even actively tries to destabilise its neighbours by bringing refugees to their common border or via Belorussia. 

Denmark is the only country in the European Union that has managed to reduce established right wing populist parties back to single digits. It has done so by establishing a consensus in society on a tough migration policy continued by its current social-democrat led government. At the same time Denmark represents a country with one of the highest standards in societal development. «  Going to Denmark » is even a reference in international development policy. Danish migration policy therefore will need to be studied more in detail to understand in how far it can provide guidance for the European Union as a whole.

The more speedy implementation of the migration pact voted in parliament in April 2024 therefore has to be a prime priority, but cannot be the last step either. Integration capacity has to become critical for migration policy.

Defence

Those who cannot defend themselves are inviting their stronger neighbours for agression. A look at the Russian maps over the last 500 years tells us that Russia has expanded continuously at the expense of its weaker neighbours from basically the city territory of Moscow until it became the largest state on earth. Military submission of neighbours is the Russian business model.

The peaceful and voluntary integration of the European space based on the rule of law is the business model of the European Union. Both concepts now geographically collide. And at least the grey zone in between is now in danger of Russian agression and occupation as demonstrated in Ukraine, trying to reintroduce the logic of 19th century empire again on the European continent.

The United States will focus their own efforts increasingly on Asia and the attempt to contain China. Europe will therefore have to provide the lions share to its own conventional defence. This can only be effectively organised making use of the possibilities of the European Union.

The Martens Centre has provided a plan in 10 steps on how to come to a viable European defence under changed geopolitical circumstances, the European Defence Pyramid. Starting with more basic ideas at the beginning it has now been outlined in much detail with the help of external experts in « The 7 D’s for sustainability – defence extented ».

Progress is already visible. The Martens Centre suggested the creation of the office of a European defence commissioner and a standing defence committee in the European Parliament. Both are now reality. The proposed increase in financial support for military mobility is now achieved through the decision of the European Commission to allow the use of regional funds for this purpose. And the new defence Commissioner has suggested the creation of an EU DARPA for military research as developed in the concept papers.

Living in dangerous times

Europe is challenged at the same time internally and externally. Internally by right wing populist parties having conquered now nearly 30% of the political space, externally by Russia trying to re-introduce the 19th century rules of empire through military agression with at least the benevolent acceptance of China. Both challenges are not unlinked. Some of the populist parties on the right and left make openly the case for China and Russia. Viktor Orban‘s Hungary is even rewarded by China with massive investments and the status of an „all weather partner“.

Ever since the collapse of the Soviet Union in 1991 we have been living in a world of cooperation. System competition between East and West was replaced by globalisation. System seemingly did not matter anymore. The production went wherever it was the cheapest. Communist China became capitalists best friend against the transfer of superior technology. In analogy to Lenin, China sold the capitalists the rope with which to hang themselves. The price paradigm replaced the security paradigm.

With China now so strong that it can challenge economically and politically for number one status globally and does, and strongly on the rise militarily, this phase has ended. China prepares for the military strangulation, if not occupation of Taiwan as demonstrated by their ever more menacing sea exercises around the island every year. Russia wages war against Ukraine only days after establishing a „no limits partnership“ with China, testing the global order established after 1945 when conquering and annexing the territory of a weaker neighbour was outlawed. The west is being challenged both in Asia and in Europe.

To defend our European way of life we need to be strong economically and militarily. We need to close the rifts in our societies and constructively end the revolt of the lower middle class.

System competition is back. The security paradigm replaces the price paradigm.