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More than a twelve months following the vote that delivered Donald Trump a decisive return victory, the Democratic party has still not 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 core constituencies because it did not focus enough on addressing basic economic anxieties. By prioritising the threat to democracy that Trumpist populism represented, liberals overlooked the kitchen-table concerns that were uppermost in many people’s minds.

A Warning for Europe

While Europe prepares for a turbulent era of politics between now and the end of the decade, that is a lesson that needs to be fully absorbed in European capitals. 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) 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 adequate to challenging times.

Era-Defining Challenges and Costly Solutions

The issues Europe faces are expensive and historic. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and developing economies that are less vulnerable to pressure by Mr Trump and China. As per a Brussels-based research institute, the new age of global instability could require an additional €250bn in annual EU defence spending. A major study last year on European economic competitiveness called for substantial investment in public goods, to be partly funded by collective EU debt.

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

However, at both the EU-wide and national levels, there remains a deficit of courage when it comes to revenue raising. The EU’s so-called “frugal” nations oppose the idea of shared debt, and EU spending plans for the next seven years are deeply unambitious. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. Yet the beleaguered centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Cost of Inaction

The reality is that without such measures, the less affluent will pay the price of financial adjustment through spending cuts and greater inequality. Bitter recent disputes over retirement reforms in both France and Germany testify to a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have eagerly leveraged to promote a politics of welfare chauvinism. Ms Le Pen’s party, for example, has resisted 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

In the US, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy demonstrated. But without a compelling progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in fiscal policy, social contracts across the continent risk being ripped up. Policymakers must avoid giving this political gift to the populist movements already on the rise in Europe.