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More than a twelve months after the vote that delivered Donald Trump a decisive comeback victory, the Democratic party has still not issued its postmortem analysis. But, recently, an prominent liberal advocacy organization published its own. The Harris campaign, its writers contended, failed to connect with key voter blocs because it failed to concentrate 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 uppermost in many people’s minds.

A Warning 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 understood in European capitals. The White House, as its newly released national security strategy indicates, is hopeful that “nationalist movements 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, backed by significant segments of blue-collar voters. But among establishment politicians and parties, it is difficult to see a response that is sufficient to challenging times.

Era-Defining Problems and Expensive Solutions

The issues Europe faces are expensive and historic. They include the war in Ukraine, sustaining 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 yearly EU defence spending. A major report last year on European economic competitiveness called for substantial investment in shared infrastructure, to be partly funded by collective EU debt.

Such a economic transformation would boost growth figures that have flatlined for years.

But, at both the EU-wide and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “frugal” nations oppose the idea of collective borrowing, and EU spending plans for the next seven years are deeply unambitious. In France, the idea of a tax on the super-rich is widely supported with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Political Paralysis

The truth is that without such measures, the less well-off will bear the brunt of fiscal tightening through austerity budgets and greater inequality. Bitter recent conflicts over retirement reforms in both France and Germany testify to a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have eagerly leveraged 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 foreign residents.

Preventing a Political Gift for Populists

In the US, Mr Trump’s promises to protect working-class 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. Absent a fundamental change in fiscal policy, societal agreements across the continent risk being torn apart. Governments must steer clear of handing this political gift to the populist movements already on the march in Europe.