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Over a year following the election that delivered Donald Trump a clear-cut comeback victory, the Democratic Party has still not released its postmortem analysis. However, recently, an prominent progressive lobby group released its own. The Harris campaign, its writers argued, failed to connect with core constituencies because it failed to concentrate enough on tackling everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for European Capitals

As the EU braces for a turbulent era of politics between now and the end of the decade, that is a message that must be fully absorbed in European capitals. The White House, as its newly released national security strategy indicates, is optimistic that “nationalist movements in Europe will soon replicate Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by large swaths of blue-collar voters. But among mainstream leaders and parties, it is difficult to see a strategy that is sufficient to troubling times.

Era-Defining Problems and Costly Solutions

The challenges Europe faces are expensive and historic. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and building economies that are more resilient to bullying by Mr Trump and China. As per a Brussels-based research institute, the new age of geopolitical insecurity could necessitate an additional €250bn in yearly EU defence spending. A major study last year on European economic competitiveness called for substantial investment in shared infrastructure, to be financed in part by collective EU debt.

Such a fiscal paradigm shift would stimulate growth figures that have stagnated for years.

But, at both the EU-wide and national levels, there continues to be a deficit of courage when it comes to generating funds. The EU’s so-called “budget hawks oppose the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are profoundly unambitious. 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 Price of Inaction

The reality is that in the absence of such measures, the less affluent will pay the price of financial adjustment through spending cuts and increased 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 happily exploited to promote a politics of nativist social policy. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has said that it would focus any benefit cuts at foreign residents.

Avoiding a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as later healthcare reductions and fiscal benefits for the wealthy demonstrated. But in the absence of a convincing progressive alternative from the Harris campaign, they worked on the election circuit. Absent a radical shift in fiscal policy, social contracts across the continent are in danger of being ripped up. Governments must steer clear of giving this electoral boon to the populist movements already on the march in Europe.