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Over a twelve months after the election that delivered Donald Trump a clear-cut comeback victory, the Democratic Party has yet to released its election autopsy. However, recently, an prominent progressive lobby group released its own. Kamala Harris's campaign, its authors contended, failed to connect with core constituencies because it did not focus enough on addressing everyday financial worries. By prioritising the threat to democracy that Trumpist populism represented, liberals overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a turbulent era of politics from now until 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 recently published national security strategy indicates, is hopeful 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, backed by significant segments of working-class voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is sufficient to troubling times.

Major Challenges and Costly Solutions

The issues Europe faces are costly and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and building economies that are more resilient to bullying by Mr Trump and China. As per a European research institute, the new age of global instability could necessitate an additional €250bn in yearly EU defence spending. A major study last year on European economic competitiveness demanded substantial investment in shared infrastructure, to be financed in part by jointly held EU debt.

Such a economic transformation would stimulate growth figures that have flatlined for years.

But, at both the pan-European and national levels, there remains a deficit of courage when it comes to generating funds. The EU’s so-called “frugal” nations oppose the idea of collective borrowing, and EU spending plans for the next seven years are deeply unambitious. In France, the idea of a tax on the super-rich is widely supported with voters. Yet the beleaguered centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Price of Political Paralysis

The reality 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 conflicts over retirement reforms in both France and Germany testify to 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 welfare chauvinism. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has stated that it would focus any benefit cuts at non-French nationals.

Avoiding a Political Gift for Populists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and fiscal benefits for the wealthy underlined. But in the absence of a convincing progressive alternative from the Harris campaign, they proved effective on the election circuit. Without a fundamental change in fiscal policy, social contracts across the continent risk being torn apart. Governments must avoid handing this political gift to the Trumpian forces already on the rise in Europe.