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Over 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, recently, an prominent liberal advocacy organization released its own. The Harris campaign, its authors argued, failed to connect with core constituencies because it failed to concentrate enough on tackling everyday financial worries. In focusing on the menace 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

As the EU braces for a tumultuous period of politics between now and the end of the decade, that is a message that must be fully understood in Brussels, Paris and Berlin. The White House, as its recently published national security strategy indicates, is optimistic that “nationalist movements in Europe will soon replicate 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 large swaths of working-class voters. But among establishment politicians and parties, it is hard to discern a response that is adequate to troubling times.

Era-Defining Problems and Expensive Solutions

The issues Europe faces are costly and historic. They encompass the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to pressure by Mr Trump and China. According to a European thinktank, the new age of geopolitical insecurity could necessitate an additional €250bn in annual EU defence spending. A significant study last year on European economic competitiveness demanded substantial investment in shared infrastructure, to be partly funded by jointly held EU debt.

Such a fiscal paradigm shift would boost growth figures that have flatlined for years.

But, at both the pan-European and national levels, there remains a deficit of courage when it comes to revenue raising. The EU’s so-called “frugal” nations resist the idea of collective borrowing, 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 embattled 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 affluent will pay the price of fiscal tightening through spending cuts and increased inequality. Bitter recent conflicts over pension cutbacks in both France and Germany testify to 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 resisted moves to raise the retirement age and has said that it would focus any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as subsequent Medicaid cuts and tax breaks for the wealthy underlined. But without a compelling progressive alternative from the Harris campaign, they proved effective on the campaign trail. Without a fundamental change in fiscal policy, social contracts across the continent are in danger of being ripped up. Policymakers must avoid handing this political gift to the Trumpian forces already on the march in Europe.