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Over a year after the election that handed Donald Trump a clear-cut return victory, the Democratic party has still not released its election autopsy. However, recently, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers contended, failed to connect with key voter blocs because it failed to concentrate enough on tackling everyday financial worries. By prioritising the threat to democracy that Trumpist populism represented, progressives neglected the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a turbulent era of politics between now and the end of the decade, that is a message that must be fully understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is optimistic that “patriotic” parties in Europe will soon mirror Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, supported by large swaths of blue-collar voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is adequate to troubling times.

Major Problems and Costly Solutions

The challenges Europe faces are expensive and historic. 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. According to a European research institute, the new age of global instability could require 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 fiscal paradigm shift would boost growth figures that have flatlined for years.

However, at both the pan-European and national levels, there remains a deficit of courage 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 deeply timid. In France, the idea of a tax on the super-rich is widely supported with voters. But the beleaguered 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 well-off will bear the brunt of fiscal tightening through austerity budgets and increased inequality. Bitter recent disputes over retirement reforms in both France and Germany testify to a developing struggle 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 promises to protect working-class interests were deeply disingenuous, as later healthcare reductions and tax breaks for the wealthy underlined. Yet in the absence of a convincing progressive counteroffer from the Harris campaign, they proved effective on the election circuit. Without a fundamental change in fiscal policy, social contracts across the continent risk being torn apart. Policymakers must avoid handing this political gift to the populist movements already on the rise in Europe.