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Over a twelve months after the vote that delivered Donald Trump a decisive return victory, the Democratic Party has yet to issued its postmortem analysis. However, recently, an prominent liberal advocacy organization released its own. Kamala Harris's campaign, its writers argued, failed to connect with key voter blocs because it failed to concentrate enough on tackling everyday financial worries. In focusing on the menace to democracy that Trumpist populism represented, progressives overlooked the kitchen-table concerns that were foremost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a tumultuous period of politics between now and the end of the decade, that is a lesson that must be fully understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is optimistic that “nationalist movements in Europe will quickly mirror 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 large swaths of working-class voters. Yet among establishment politicians and parties, it is hard to discern a response that is adequate to challenging times.

Major Problems and Costly Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and building economies that are more resilient to pressure by Mr Trump and China. As per a Brussels-based research institute, the new age of geopolitical insecurity could necessitate an additional €250bn in annual EU defence spending. A significant report last year on European economic competitiveness called for massive investment in shared infrastructure, 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 pan-European and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “budget hawks oppose 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 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 Inaction

The reality is that in the absence of such measures, the less well-off will pay the price of financial adjustment through austerity budgets and greater inequality. Bitter recent disputes over retirement reforms in both France and Germany testify to a developing struggle over the future of the European welfare state – 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.

Avoiding a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were deeply disingenuous, as subsequent Medicaid cuts and tax breaks for the wealthy demonstrated. But in the absence of a convincing progressive counteroffer from the Harris campaign, they worked on the election circuit. Without a fundamental change in economic approach, societal agreements across the continent risk being ripped up. Policymakers must avoid handing this political gift to the populist movements already on the rise in Europe.