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More than a twelve months following the vote that delivered Donald Trump a decisive comeback victory, the Democratic Party has still not released its postmortem analysis. However, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers argued, failed to connect with core constituencies because it did not focus enough on addressing everyday financial worries. By prioritising the threat to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for European Capitals

As the EU braces for a tumultuous period of politics between now and the end of the decade, that is a message 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 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, backed by significant segments of blue-collar voters. Yet among establishment politicians and parties, it is difficult to see a strategy that is adequate to challenging times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are costly and historic. They include the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to pressure by Mr Trump and China. According to a Brussels-based research institute, the new age of global instability could necessitate an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness demanded massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

Such a economic transformation would stimulate growth figures that have flatlined for years.

However, 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 “frugal” nations resist the idea of shared debt, 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 embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Inaction

The reality is that without such measures, the less well-off will bear the brunt of financial adjustment through spending cuts and greater inequality. Acrimonious recent disputes 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 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 focus any benefit cuts at non-French nationals.

Avoiding 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 fiscal benefits for the wealthy underlined. But without a convincing progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Without a radical shift in fiscal policy, social contracts across the continent risk being torn apart. Governments must avoid giving this political gift to the populist movements already on the rise in Europe.