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More than a year after the vote that delivered Donald Trump a decisive comeback victory, the Democratic party has yet to issued its postmortem analysis. However, recently, an influential progressive lobby group released its own. The Harris campaign, its writers argued, failed to connect with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, liberals overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for Europe

As the EU braces for a turbulent era of politics from now until the end of the decade, that is a message that needs to be fully absorbed in European capitals. The White House, as its recently published national security strategy indicates, is hopeful that “nationalist movements in Europe will quickly replicate Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, supported by large swaths of blue-collar voters. But among mainstream leaders and parties, it is hard to discern a response that is adequate to challenging times.

Era-Defining Challenges and Costly Solutions

The challenges Europe faces are expensive and historic. They include the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient to bullying by Mr Trump and China. As per a Brussels-based thinktank, the new age of global instability could necessitate an additional €250bn in annual EU defence spending. A major report 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 boost growth figures that have flatlined for years.

However, at both the pan-European and national levels, there remains a lack of boldness when it comes to revenue raising. The EU’s so-called “frugal” nations 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 beleaguered centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The truth is that without such measures, the less affluent will pay the price of fiscal tightening through spending cuts and increased inequality. Acrimonious recent conflicts over pension cutbacks in both France and Germany testify to a growing battle 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 resisted moves to raise the retirement age and has said that it would focus any benefit cuts at non-French nationals.

Avoiding a Political Gift for Populists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as subsequent Medicaid cuts and fiscal benefits for the wealthy demonstrated. Yet in the absence of a compelling progressive alternative from the Harris campaign, they proved effective on the election circuit. Absent a radical shift in fiscal policy, social contracts across the continent risk being torn apart. Policymakers must avoid giving this electoral boon to the populist movements already on the march in Europe.