How does slashing social programs and dramatically increasing working hours solve the problem of a missing industry hub, or energy independence? These seem entirely disconnected.

If European countries want to survive as independent powers rather than as vassal states of the USA and/or China (and this is still in doubt) then they will eventually have to re-industrialize. Like if they want to have any stuff then someone has to make the stuff. They're also going to have to rebuild their militaries instead of counting on the USA to defend them. All of that will require an enormous amount of capital and the money will have to come from somewhere. Taxing the rich won't be enough, which means the only possible course of action is to cut social spending and force their citizens to work harder. This will be unpopular and cause a lot of protests by naive people who don't want to face the harsh realities of modern geopolitics and natural resource constraints.