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More than a twelve months following the election that delivered Donald Trump a decisive return victory, the Democratic party has still not issued its postmortem analysis. However, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its authors contended, failed to connect with key voter blocs because it did not focus enough on tackling everyday financial worries. In focusing on 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 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 makes clear, is optimistic 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, supported by significant segments of working-class voters. But among mainstream leaders and parties, it is difficult to see a strategy that is adequate to challenging times.

Major Challenges and Expensive Solutions

The challenges Europe faces are expensive and historic. They encompass the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient 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 shared infrastructure, to be partly funded by collective EU debt.

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

But, at both the EU-wide and national levels, there continues to be a deficit of courage 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 deeply timid. In France, the idea of a wealth tax is overwhelmingly popular 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 truth is that in the absence of such measures, the less affluent will pay the price of fiscal tightening through austerity budgets 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 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 stated that it would focus any benefit cuts at non-French nationals.

Preventing a Political Gift for Populists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as subsequent Medicaid cuts and fiscal benefits for the wealthy underlined. Yet in the absence of a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Absent a fundamental change in fiscal policy, social contracts across the continent are in danger of being torn apart. Governments must avoid handing this electoral boon to the Trumpian forces already on the march in Europe.