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Over a twelve months after the election that handed Donald Trump a clear-cut comeback victory, the Democratic party has yet to issued its postmortem analysis. However, recently, an prominent liberal advocacy organization released its own. The Harris campaign, its authors contended, did not resonate with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. In focusing on the menace to democracy that Maga authoritarianism represented, liberals neglected the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for Europe

While Europe prepares for a turbulent era of politics from now until the end of the decade, that is a lesson 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 “nationalist movements in Europe will soon mirror Mr Trump’s success. Within Europe's core nations, 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 strategy that is sufficient to challenging times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are expensive and era-defining. They encompass the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a European thinktank, the new age of geopolitical insecurity could require an additional €250bn in annual EU defence spending. A significant report last year on European economic competitiveness called for massive investment in public goods, to be financed in part by collective EU debt.

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

But, at both the pan-European and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “budget hawks resist the idea of shared debt, and Brussels’ budget proposals for the next seven years are profoundly 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 Cost of Political Paralysis

The truth is that in the absence of such measures, the less well-off will pay the price of financial adjustment through spending cuts and increased inequality. Bitter recent disputes over retirement reforms in both France and Germany highlight a growing battle over the future of the European social model – 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 foreign residents.

Avoiding a Political Gift for Populists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were deeply disingenuous, as subsequent healthcare reductions and tax breaks for the wealthy underlined. Yet without a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Without a radical shift in fiscal policy, societal agreements across the continent are in danger of being ripped up. Governments must steer clear of giving this political gift to the populist movements already on the march in Europe.