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Over a twelve months following the vote that handed Donald Trump a decisive comeback victory, the Democratic Party has yet to released its election autopsy. But, last week, an influential progressive lobby group published its own. The Harris campaign, its writers contended, did not resonate with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. In focusing on the menace to democracy that Maga authoritarianism represented, liberals neglected the kitchen-table concerns that were uppermost in many people’s minds.

A Warning for European Capitals

As the EU braces for a tumultuous period of politics between now and the end of the decade, that is a message that needs to be fully understood in European capitals. The White House, as its recently published national security strategy makes clear, is hopeful that “patriotic” parties in Europe will quickly mirror Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by significant segments of blue-collar voters. Yet among establishment politicians and parties, it is hard to discern a response that is adequate to challenging times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are costly and era-defining. They encompass the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and building economies that are more resilient to bullying by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could require an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness demanded substantial investment in shared infrastructure, to be financed in part by jointly held EU debt.

Such a economic transformation would stimulate growth figures that have stagnated 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 “budget hawks 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 widely supported with voters. But the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The reality is that in the absence of such measures, the less affluent will bear the brunt of financial adjustment through austerity budgets and increased inequality. Acrimonious recent disputes over pension cutbacks in both France and Germany highlight a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have happily exploited to promote a politics of nativist social policy. 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 foreign residents.

Avoiding a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were largely insincere, as subsequent Medicaid cuts and tax breaks for the wealthy demonstrated. Yet without a compelling progressive counteroffer from the Harris campaign, they worked on the campaign trail. Absent a radical shift in fiscal policy, social contracts across the continent risk being ripped up. Governments must steer clear of giving this electoral boon to the populist movements already on the rise in Europe.