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Over a twelve months following the election that handed Donald Trump a decisive comeback victory, the Democratic party has yet to released its postmortem analysis. But, last week, an influential liberal advocacy organization published its own. The Harris campaign, its writers contended, failed to connect with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism 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 turbulent era of politics between now and the end of the decade, that is a message that needs to be fully understood in Brussels, Paris and Berlin. The White House, as its recently published national security strategy makes clear, is hopeful that “nationalist movements in Europe will soon replicate 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 significant segments of blue-collar voters. But among mainstream leaders and parties, it is hard to discern a response that is adequate to troubling times.

Era-Defining Problems and Costly Solutions

The issues Europe faces are costly and historic. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could necessitate an additional €250bn in annual 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 fiscal paradigm shift would boost growth figures that have flatlined for years.

However, at both the pan-European 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 shared debt, and EU spending plans for the next seven years are profoundly unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The truth is that without such measures, the less well-off will bear the brunt of fiscal tightening 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 trend 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 said that it would target any benefit cuts at foreign residents.

Avoiding a Political Gift for Nationalists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were deeply disingenuous, as subsequent Medicaid cuts and fiscal benefits for the wealthy demonstrated. But in the absence of a convincing progressive alternative from the Harris campaign, they worked on the election circuit. Absent a fundamental change in fiscal policy, social contracts across the continent are in danger of being ripped up. Governments must steer clear of giving this political gift to the Trumpian forces already on the march in Europe.