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Over a twelve months following the vote that handed Donald Trump a decisive return victory, the Democratic Party has yet to released its postmortem analysis. But, recently, an influential liberal advocacy organization released its own. Kamala Harris's campaign, its writers contended, failed to connect with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for Europe

As the EU braces for a turbulent era of politics between now and the end of the decade, that is a message that needs to be fully understood in European capitals. The White House, as its recently published national security strategy makes clear, is optimistic that “nationalist movements in Europe will soon mirror Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by large swaths of blue-collar voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is sufficient to challenging times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are expensive and era-defining. They encompass the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are less vulnerable to pressure by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could require an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness demanded 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 stagnated for years.

But, at both the EU-wide and national levels, there remains a lack of boldness when it comes to generating funds. The EU’s so-called “budget hawks resist 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. Yet the beleaguered centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Cost of Inaction

The reality is that in the absence of such measures, the less well-off will pay the price of fiscal tightening through spending cuts and greater inequality. Bitter recent disputes over pension cutbacks in both France and Germany highlight a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have happily exploited to promote a politics of nativist social policy. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has stated that it would focus any benefit cuts at non-French nationals.

Avoiding a Political Gift for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were largely insincere, as later healthcare reductions and fiscal benefits for the wealthy demonstrated. But without a convincing progressive counteroffer from the Harris campaign, they worked on the election circuit. Absent a fundamental change in economic approach, societal agreements across the continent are in danger of being torn apart. Governments must avoid handing this political gift to the populist movements already on the rise in Europe.