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More than a twelve months following the vote that handed Donald Trump a decisive return victory, the Democratic Party has still not issued its election autopsy. But, recently, an influential progressive lobby group published its own. Kamala Harris's campaign, its authors argued, failed to connect with key voter blocs because it failed to concentrate enough on tackling everyday financial worries. By prioritising the threat to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were foremost in many people’s minds.

A Warning for European Capitals

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a lesson that needs to be fully understood in European capitals. The White House, as its newly released national security strategy makes clear, is optimistic that “nationalist movements in Europe will quickly replicate Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by significant segments of working-class voters. But among establishment politicians and parties, it is difficult to see a response that is adequate to challenging times.

Era-Defining Problems and Expensive Solutions

The issues Europe faces are costly and historic. They encompass the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient 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 significant report last year on European economic competitiveness demanded substantial investment in public goods, to be financed in part by jointly held EU debt.

Such a economic transformation would stimulate 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 revenue raising. The EU’s so-called “budget hawks oppose the idea of collective borrowing, and EU spending plans 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 – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price 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. Bitter recent conflicts over retirement reforms in both France and Germany highlight a developing struggle over the future of the European welfare state – 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 opposed moves to raise the retirement age and has said that it would focus any benefit cuts at non-French nationals.

Preventing a Strategic Advantage for Nationalists

In the US, Mr Trump’s promises to protect blue‑collar interests were deeply disingenuous, as later healthcare reductions and fiscal benefits for the wealthy demonstrated. Yet in the absence of a convincing progressive alternative from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in economic approach, social contracts across the continent are in danger of being ripped up. Governments must steer clear of handing this electoral boon to the populist movements already on the rise in Europe.