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Over a year following the vote that delivered Donald Trump a decisive return 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 writers argued, failed to connect with core constituencies because it failed to concentrate enough on tackling everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, progressives neglected the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson 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 Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is hopeful that “patriotic” parties in Europe will quickly 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) lead the polls, supported by significant segments of blue-collar voters. Yet among establishment politicians and parties, it is hard to discern a strategy that is sufficient to troubling times.

Era-Defining Challenges and Costly Solutions

The issues Europe faces are costly and historic. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient to bullying by Mr Trump and China. According to a Brussels-based thinktank, the new age of geopolitical insecurity could require an additional €250bn in annual EU defence spending. A major study 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 boost growth figures that have flatlined for years.

However, at both the EU-wide and national levels, there continues to be a lack of boldness when it comes to revenue raising. The EU’s so-called “frugal” nations resist the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are profoundly unambitious. 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 – 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 austerity budgets and increased inequality. Acrimonious recent disputes over retirement reforms in both France and Germany highlight a growing battle over the future of the European welfare state – a trend that the RN and the AfD have eagerly leveraged to promote a politics of welfare chauvinism. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has stated that it would target any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Nationalists

In the US, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. But without a compelling progressive counteroffer from the Harris campaign, they worked on the election circuit. Without a fundamental change in fiscal policy, social contracts across the continent risk being torn apart. Policymakers must avoid giving this electoral boon to the Trumpian forces already on the march in Europe.