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More than a twelve months following the election that handed Donald Trump a decisive comeback victory, the Democratic party has yet to released its postmortem analysis. But, recently, an prominent progressive lobby group published its own. The Harris campaign, its writers 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, progressives overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for European Capitals

While Europe prepares for a turbulent era of politics between now and the end of the decade, that is a message that must 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 quickly 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 blue-collar voters. Yet among mainstream leaders and parties, it is difficult to see a strategy that is adequate to troubling times.

Major Challenges and Expensive Solutions

The issues Europe faces are costly and era-defining. They encompass the war in Ukraine, sustaining 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 Brussels-based thinktank, the new age of global instability could require an additional €250bn in annual EU defence spending. A significant report last year on European economic competitiveness demanded substantial investment in public goods, to be partly funded by jointly held EU debt.

Such a economic transformation would stimulate growth figures that have flatlined 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 “budget hawks resist the idea of collective borrowing, and EU spending plans for the next seven years are profoundly unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. But the embattled centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Price of Political Paralysis

The reality is that in the absence of such measures, the less well-off will bear the brunt of fiscal tightening through austerity budgets and greater inequality. Acrimonious recent conflicts 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 opposed moves to raise the retirement age and has stated that it would focus any benefit cuts at non-French nationals.

Preventing a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were deeply disingenuous, as later Medicaid cuts and tax breaks for the wealthy demonstrated. Yet without a compelling progressive counteroffer from the Harris campaign, they worked on the election circuit. Without a radical shift in fiscal policy, social contracts across the continent are in danger of being ripped up. Governments must avoid giving this electoral boon to the Trumpian forces already on the rise in Europe.