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More than a twelve months after the vote that handed Donald Trump a clear-cut return victory, the Democratic party has yet to released its postmortem analysis. However, last week, an prominent progressive lobby group released its own. The Harris campaign, its authors contended, did not resonate with core constituencies because it failed to concentrate enough on tackling everyday financial worries. In focusing on the threat to democracy that Maga authoritarianism 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 tumultuous period of politics from now until the end of the decade, that is a lesson that must be fully absorbed in Brussels, Paris and Berlin. The White House, as its recently published 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) lead the polls, backed by significant segments of blue-collar voters. But among establishment politicians and parties, it is difficult to see a strategy that is sufficient to troubling times.

Era-Defining Challenges and Expensive Solutions

The challenges Europe faces are costly and historic. They encompass 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 European thinktank, the new age of global instability could require an additional €250bn in yearly EU defence spending. A significant study last year on European economic competitiveness demanded massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

Such a fiscal paradigm shift would stimulate growth figures that have stagnated for years.

However, at both the EU-wide and national levels, there remains 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 unambitious. In France, the idea of a wealth tax is widely supported with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Cost of Political Paralysis

The reality is that without such measures, the less affluent will pay the price of fiscal tightening through austerity budgets and greater inequality. Acrimonious recent disputes over retirement reforms in both France and Germany highlight a developing struggle 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 opposed moves to raise the retirement age and has said that it would focus any benefit cuts at foreign residents.

Avoiding a Political Gift for Populists

In the US, Mr Trump’s pledges to protect blue‑collar interests were largely insincere, as subsequent healthcare reductions and fiscal benefits for the wealthy underlined. But without a convincing progressive alternative from the Harris campaign, they worked on the campaign trail. Without a fundamental change in economic approach, social contracts across the continent are in danger of being ripped up. Policymakers must steer clear of giving this electoral boon to the Trumpian forces already on the rise in Europe.