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More than a year after the election that handed Donald Trump a clear-cut return victory, the Democratic Party has still not issued its postmortem analysis. But, recently, an prominent liberal advocacy organization released its own. Kamala Harris's campaign, its writers argued, failed to connect with key voter blocs because it did not focus enough on addressing basic economic anxieties. By prioritising the threat to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for European Capitals

While Europe prepares for a tumultuous period of politics between now and the end of the decade, that is a message that needs to be fully understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy indicates, is hopeful that “nationalist movements in Europe will quickly mirror 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, backed by significant segments of working-class voters. But among establishment politicians and parties, it is difficult to see a response that is adequate to troubling times.

Major Problems and Costly Solutions

The issues Europe faces are costly and historic. They encompass the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a Brussels-based thinktank, the new age of geopolitical insecurity could necessitate an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness called for massive investment in public goods, to be partly funded by collective EU debt.

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

But, at both the EU-wide and national levels, there remains a deficit of courage when it comes to generating funds. The EU’s so-called “budget hawks resist the idea of shared debt, and EU spending plans for the next seven years are profoundly unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Price of Political Paralysis

The truth is that in the absence of such measures, the less affluent will bear the brunt of financial adjustment through austerity budgets and greater inequality. Acrimonious recent disputes over retirement reforms in both France and Germany highlight a developing struggle over the future of the European welfare state – a trend 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 opposed moves to raise the retirement age and has said that it would target any benefit cuts at foreign residents.

Avoiding a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were deeply disingenuous, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. But in the absence of a compelling progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in fiscal policy, societal agreements across the continent risk being ripped up. Policymakers must avoid handing this political gift to the Trumpian forces already on the rise in Europe.