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Over a year following the election that handed Donald Trump a decisive comeback victory, the Democratic Party has yet to released its postmortem analysis. However, last week, an prominent liberal advocacy organization released its own. The Harris campaign, its authors argued, failed to connect with core constituencies because it did not focus enough on tackling basic economic anxieties. In focusing on the threat to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for European Capitals

As the EU braces for a tumultuous period of politics between now and the end of the decade, that is a message that must be fully understood in European capitals. The White House, as its newly released national security strategy makes clear, is optimistic that “patriotic” parties in Europe will quickly replicate Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, supported by significant segments of working-class voters. But among establishment politicians and parties, it is difficult to see a response that is sufficient to troubling times.

Era-Defining Challenges and Costly Solutions

The issues Europe faces are expensive and era-defining. They encompass the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and developing 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 necessitate an additional €250bn in yearly EU defence spending. A major 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 boost growth figures that have stagnated for years.

But, at both the pan-European and national levels, there continues to be a lack of boldness when it comes to generating funds. 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. But 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 without such measures, the less well-off will pay the price of financial adjustment through spending cuts and increased 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 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 stated that it would focus any benefit cuts at non-French nationals.

Preventing a Political Gift for Nationalists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and fiscal benefits for the wealthy demonstrated. Yet in the absence of a compelling progressive counteroffer from the Harris campaign, they worked on the campaign trail. Without a radical shift in fiscal policy, social contracts across the continent risk being ripped up. Governments must steer clear of handing this political gift to the populist movements already on the rise in Europe.