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More than a twelve months following the election that handed Donald Trump a clear-cut comeback victory, the Democratic Party has yet to released its election autopsy. However, last week, an influential liberal advocacy organization published its own. Kamala Harris's campaign, its authors argued, failed to connect with core constituencies because it did not focus enough on addressing everyday financial worries. In focusing on the menace to democracy that Maga authoritarianism 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 from now until the end of the decade, that is a lesson that must be fully absorbed in European capitals. The White House, as its recently published national security strategy indicates, is optimistic that “nationalist movements in Europe will quickly mirror Mr Trump’s success. Within Europe'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. Yet among mainstream leaders and parties, it is hard to discern a response that is sufficient to troubling times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and developing economies that are more resilient to pressure by Mr Trump and China. As per a Brussels-based research institute, the new age of global instability could necessitate an additional €250bn in annual EU defence spending. A significant report last year on European economic competitiveness called for massive investment in shared infrastructure, to be partly funded by collective EU debt.

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

But, 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 “budget hawks resist the idea of collective borrowing, and EU spending plans for the next seven years are profoundly timid. In France, the idea of a tax on the super-rich is widely supported with voters. Yet the embattled centrist government – though 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 well-off will pay the price of fiscal tightening through spending cuts and increased inequality. Bitter recent disputes over pension cutbacks in both France and Germany testify to 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 stated that it would target any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Populists

In the US, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as later healthcare reductions and tax breaks for the wealthy demonstrated. Yet in the absence of a compelling progressive alternative from the Harris campaign, they worked on the campaign trail. Absent a radical shift in fiscal policy, societal agreements across the continent risk being ripped up. Governments must avoid handing this political gift to the Trumpian forces already on the rise in Europe.