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Over a twelve months following the vote that handed Donald Trump a clear-cut comeback victory, the Democratic party has yet to released its election autopsy. But, last week, an influential liberal advocacy organization released its own. Kamala Harris's campaign, its writers contended, failed to connect with core constituencies because it did not focus enough on tackling everyday financial worries. In focusing on the threat to democracy that Maga authoritarianism represented, progressives neglected 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 understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is optimistic that “nationalist movements in Europe will soon mirror Mr Trump’s success. Within Europe'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 challenging times.

Era-Defining Problems 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, addressing demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. According to a Brussels-based research institute, the new age of geopolitical insecurity could necessitate an additional €250bn in annual EU defence spending. A major report last year on European economic competitiveness called for massive investment in public goods, 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 EU-wide and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “frugal” nations resist the idea of shared debt, and Brussels’ budget proposals for the next seven years are deeply timid. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. Yet the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Inaction

The reality is that without such measures, the less affluent will bear the brunt of financial adjustment through spending cuts and greater inequality. Bitter recent disputes over retirement reforms in both France and Germany highlight a developing struggle over the future of the European welfare state – a phenomenon that the RN and the AfD have eagerly leveraged 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 target any benefit cuts at foreign residents.

Preventing a Strategic Advantage 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 underlined. Yet without a convincing progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in economic approach, social contracts across the continent are in danger of being ripped up. Governments must avoid handing this political gift to the populist movements already on the rise in Europe.