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More than a twelve months following the election that handed Donald Trump a decisive return victory, the Democratic Party has yet to released its election autopsy. But, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers contended, did not resonate with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. In focusing on the menace to democracy that Maga authoritarianism represented, liberals neglected the kitchen-table concerns that were foremost in many people’s minds.

A Lesson for European Capitals

While Europe prepares 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 indicates, is optimistic that “patriotic” parties in Europe will quickly replicate Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by significant segments of working-class voters. But among mainstream leaders and parties, it is hard to discern a response that is sufficient to troubling times.

Major Problems and Costly Solutions

The challenges Europe faces are costly and era-defining. 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 European research institute, 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 called for substantial investment in shared infrastructure, to be financed in part by jointly held EU debt.

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

But, at both the EU-wide and national levels, there continues to be a lack of boldness when it comes to generating funds. The EU’s so-called “budget hawks oppose the idea of shared debt, and Brussels’ budget proposals 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 – refuses to contemplate such a move.

The Price of Political Paralysis

The reality is that in the absence of such measures, the less well-off will pay the price of fiscal tightening through austerity budgets and increased inequality. Acrimonious recent conflicts over retirement reforms in both France and Germany testify to a developing struggle over the future of the European social model – a trend that the RN and the AfD have happily exploited 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 target any benefit cuts at foreign residents.

Preventing a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were largely insincere, as subsequent healthcare reductions and tax breaks for the wealthy underlined. But in the absence of a compelling progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in fiscal policy, societal agreements across the continent are in danger of being ripped up. Governments must avoid handing this political gift to the populist movements already on the march in Europe.