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More than a twelve months after the election that delivered Donald Trump a decisive return victory, the Democratic Party has yet to released its postmortem analysis. However, recently, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers argued, failed to connect with key voter blocs because it did not focus enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, liberals neglected the kitchen-table concerns that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a turbulent era of politics from now until the end of the decade, that is a lesson that needs to be fully absorbed in European capitals. The White House, as its newly released national security strategy indicates, is hopeful that “patriotic” parties in Europe will soon mirror Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of working-class voters. Yet among establishment politicians and parties, it is difficult to see a strategy that is sufficient to troubling times.

Era-Defining Problems and Costly Solutions

The challenges Europe faces are costly and historic. They include the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and developing economies that are less vulnerable to pressure by Mr Trump and China. As per a Brussels-based 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 called for massive investment in shared infrastructure, to be partly funded by collective EU debt.

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

However, at both the pan-European and national levels, there continues to be a deficit of courage when it comes to generating funds. 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 widely supported with voters. Yet the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Political Paralysis

The truth is that in the absence of such measures, the less well-off will pay the price of financial adjustment through austerity budgets and increased inequality. Acrimonious 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 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 stated that it would focus any benefit cuts at foreign residents.

Preventing a Political Gift for Nationalists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as later healthcare reductions and fiscal benefits for the wealthy underlined. Yet without a convincing progressive alternative from the Harris campaign, they proved effective on the election circuit. Absent a fundamental change in fiscal policy, societal agreements across the continent risk being ripped up. Policymakers must steer clear of giving this political gift to the populist movements already on the march in Europe.