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Over a year after the vote that handed Donald Trump a clear-cut comeback victory, the Democratic Party has still not issued its postmortem analysis. However, last week, an influential progressive lobby group published its own. The Harris campaign, its writers contended, did not resonate with core constituencies because it failed to concentrate enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for Europe

While Europe prepares for a tumultuous period of politics from now until the end of the decade, that is a message that must be fully absorbed in European capitals. The White House, as its recently published national security strategy makes clear, 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) lead the polls, backed by large swaths of blue-collar voters. But among establishment politicians and parties, it is difficult to see a strategy that is adequate to troubling times.

Major Problems and Costly Solutions

The challenges Europe faces are costly and historic. They encompass the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a European research institute, the new age of global instability could require an additional €250bn in annual EU defence spending. A major report last year on European economic competitiveness called for substantial investment in public goods, to be partly funded by jointly held EU debt.

Such a economic transformation would boost 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 resist the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are deeply unambitious. In France, the idea of a tax on the super-rich is widely supported with voters. But the embattled centrist government – while 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 austerity budgets and greater inequality. Acrimonious recent disputes over retirement reforms in both France and Germany highlight a developing struggle over the future of the European social model – a phenomenon 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 said that it would target any benefit cuts at non-French nationals.

Preventing a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as later healthcare reductions and fiscal benefits for the wealthy demonstrated. Yet without a compelling progressive counteroffer from the Harris campaign, they worked on the campaign trail. Without a fundamental change in fiscal policy, social contracts across the continent risk being ripped up. Governments must avoid handing this electoral boon to the populist movements already on the march in Europe.