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More than a year following the election that delivered Donald Trump a decisive comeback victory, the Democratic party has still not released its postmortem analysis. But, last week, an influential progressive lobby group published its own. The Harris campaign, its writers contended, failed to connect with core constituencies because it failed to concentrate enough on addressing everyday financial worries. In focusing on the threat to democracy that Maga authoritarianism represented, progressives overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for Europe

As the EU braces for a tumultuous period of politics from now until 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 indicates, is optimistic that “nationalist movements in Europe will quickly replicate Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by significant segments of working-class voters. But among mainstream leaders and parties, it is difficult to see a strategy that is sufficient to troubling times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are costly and historic. They encompass 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 global instability could require an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness called for massive 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 EU-wide and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “budget hawks oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are profoundly timid. In France, the idea of a wealth tax is widely supported with voters. But the beleaguered centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Cost of Inaction

The reality is that in the absence of such measures, the less affluent will pay the price of fiscal tightening through austerity budgets and increased inequality. Acrimonious recent conflicts over pension cutbacks in both France and Germany testify to a developing struggle over the future of the European welfare state – a trend that the RN and the AfD have eagerly leveraged 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 Political Gift for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. Yet in the absence of a compelling progressive counteroffer from the Harris campaign, they worked on the election circuit. Absent a fundamental change in economic approach, societal agreements across the continent risk being torn apart. Policymakers must steer clear of giving this political gift to the populist movements already on the march in Europe.