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More than a twelve months after the vote that handed Donald Trump a decisive comeback victory, the Democratic party has yet to issued its election autopsy. But, recently, an influential progressive lobby group released its own. Kamala Harris's campaign, its authors contended, failed to connect with core constituencies because it failed to concentrate enough on tackling basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for European Capitals

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a message that needs to be fully absorbed in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is hopeful that “nationalist movements in Europe will soon replicate 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. But among establishment politicians and parties, it is hard to discern a strategy that is adequate to troubling times.

Era-Defining Challenges and Costly Solutions

The challenges Europe faces are costly and era-defining. They include the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and building economies that are less vulnerable to pressure by Mr Trump and China. According to a Brussels-based thinktank, the new age of geopolitical insecurity could require an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness called for massive investment in public goods, to be partly funded by jointly held EU debt.

Such a fiscal paradigm shift would boost growth figures that have flatlined for years.

But, at both the EU-wide 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 Brussels’ budget proposals for the next seven years are profoundly timid. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Cost of Political Paralysis

The reality is that in the absence of such measures, the less well-off will bear the brunt of fiscal tightening through austerity budgets and increased inequality. Bitter recent disputes over retirement reforms in both France and Germany testify to a developing struggle over the future of the European social model – a trend 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.

Avoiding a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were deeply disingenuous, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. But in the absence of a compelling progressive counteroffer from the Harris campaign, they worked on the election circuit. Absent a fundamental change in fiscal policy, societal agreements across the continent risk being torn apart. Governments must avoid giving this political gift to the populist movements already on the rise in Europe.