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More than a twelve months after the election that handed Donald Trump a clear-cut comeback victory, the Democratic Party has still not issued its election autopsy. However, recently, an prominent progressive lobby group published its own. The Harris campaign, its authors argued, did not resonate with core constituencies because it did not focus enough on addressing everyday financial worries. By prioritising the menace to democracy that Maga authoritarianism represented, liberals overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson 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 must be fully absorbed in Brussels, Paris and Berlin. 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. In the EU’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 working-class 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 costly and era-defining. 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. According to a Brussels-based thinktank, the new age of geopolitical insecurity could necessitate an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness called for massive investment in shared infrastructure, to be financed in part by collective EU debt.

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

However, at both the pan-European and national levels, there remains a lack of boldness when it comes to revenue raising. The EU’s so-called “frugal” nations oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are deeply 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 Price of Inaction

The reality is that without such measures, the less well-off will bear the brunt of financial adjustment through spending cuts and greater inequality. Acrimonious recent disputes over pension cutbacks 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 opposed moves to raise the retirement age and has said that it would target any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as later Medicaid cuts and fiscal benefits for the wealthy underlined. Yet in the absence of a compelling progressive alternative from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in fiscal policy, social contracts across the continent risk being ripped up. Governments must avoid giving this political gift to the populist movements already on the march in Europe.