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Over a year after the vote that delivered Donald Trump a clear-cut return victory, the Democratic party has still not issued its postmortem analysis. However, recently, an prominent progressive lobby group released its own. Kamala Harris's campaign, its authors argued, did not resonate with key voter blocs because it failed to concentrate enough on tackling basic economic anxieties. In focusing on the menace to democracy that Maga authoritarianism 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 from now until the end of the decade, that is a message that must be fully understood in European capitals. The White House, as its newly released national security strategy indicates, is hopeful that “nationalist movements in Europe will quickly mirror Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by large swaths of working-class voters. Yet among establishment politicians and parties, it is difficult to see a strategy that is sufficient to troubling times.

Major Challenges and Expensive Solutions

The challenges Europe faces are costly and era-defining. They include 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. According to a Brussels-based research institute, the new age of global instability could require an additional €250bn in annual EU defence spending. A significant study last year on European economic competitiveness demanded massive investment in public goods, to be financed in part by jointly held EU debt.

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

The Price of Inaction

The truth is that in the absence of such measures, the less affluent will bear the brunt of financial adjustment through spending cuts and increased inequality. Acrimonious recent disputes over retirement reforms in both France and Germany testify to a growing battle over the future of the European social model – a trend 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 target any benefit cuts at foreign residents.

Preventing a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as later Medicaid cuts and tax breaks for the wealthy underlined. Yet without a compelling progressive counteroffer from the Harris campaign, they worked on the campaign trail. Absent a fundamental change in fiscal policy, societal agreements across the continent are in danger of being ripped up. Policymakers must avoid giving this political gift to the populist movements already on the march in Europe.