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Over a twelve months following the election that handed Donald Trump a decisive return victory, the Democratic Party has still not released its postmortem analysis. But, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers contended, failed to connect with core constituencies because it did not focus enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, progressives 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 from now until the end of the decade, that is a lesson that must be fully absorbed in Brussels, Paris and Berlin. The White House, as its recently published national security strategy indicates, is hopeful that “nationalist movements in Europe will quickly mirror 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. Yet among establishment politicians and parties, it is hard to discern a strategy that is sufficient to challenging times.

Era-Defining Problems and Costly Solutions

The issues Europe faces are costly and era-defining. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are more resilient to bullying 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 report last year on European economic competitiveness called for substantial investment in public goods, to be financed in part 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 continues to be a deficit of courage when it comes to generating funds. The EU’s so-called “budget hawks resist the idea of shared debt, 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 – though desperate to cut its budget deficit – will not consider such a move.

The Price of Inaction

The reality is that in the absence of such measures, the less well-off will bear the brunt of financial adjustment through spending cuts and greater inequality. Bitter recent disputes over pension cutbacks 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 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 non-French nationals.

Preventing a Strategic Advantage for Populists

In the US, Mr Trump’s pledges to protect blue‑collar interests were largely insincere, as later healthcare reductions and tax breaks for the wealthy demonstrated. Yet without a convincing progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a radical shift in fiscal policy, societal agreements across the continent risk being torn apart. Governments must avoid handing this electoral boon to the populist movements already on the rise in Europe.