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Over a twelve months following the election that delivered Donald Trump a decisive comeback victory, the Democratic party has still not released its election autopsy. However, last week, an prominent progressive lobby group published its own. Kamala Harris's campaign, its writers argued, did not resonate with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. In focusing on the menace to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were foremost 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 lesson that needs to be fully absorbed in European capitals. The White House, as its newly released national security strategy makes clear, is hopeful that “patriotic” parties in Europe will quickly 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) top the polls, supported by large swaths of blue-collar voters. But among establishment politicians and parties, it is difficult to see a response that is adequate to challenging times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are expensive and historic. They encompass 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 massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

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

But, at both the EU-wide and national levels, there continues to be a lack of boldness when it comes to revenue raising. The EU’s so-called “budget hawks 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 overwhelmingly popular with voters. But the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Inaction

The truth is that without such measures, the less affluent will pay the price of fiscal tightening through austerity budgets and greater inequality. Acrimonious recent disputes over retirement reforms in both France and Germany testify to a growing battle over the future of the European social model – a trend that the RN and the AfD have eagerly leveraged to promote a politics of welfare chauvinism. 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 Political Gift for Nationalists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were largely insincere, as subsequent healthcare reductions and tax breaks for the wealthy demonstrated. Yet without a convincing progressive counteroffer from the Harris campaign, they worked on the election circuit. Without 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 political gift to the populist movements already on the rise in Europe.