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More than a twelve months after the election that handed Donald Trump a decisive return victory, the Democratic Party has yet to released its election autopsy. But, recently, an prominent liberal advocacy organization released its own. The Harris campaign, its authors argued, failed to connect with core constituencies 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 bread-and-butter issues that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a tumultuous period 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 recently published national security strategy makes clear, is hopeful that “nationalist movements in Europe will soon mirror Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of blue-collar voters. But among mainstream leaders and parties, it is difficult to see a strategy that is adequate to challenging times.

Era-Defining Challenges 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 developing economies that are more resilient to bullying by Mr Trump and China. As per a European research institute, the new age of global instability could require an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness called for 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.

However, 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 collective borrowing, and EU spending plans for the next seven years are deeply timid. In France, the idea of a tax on the super-rich is widely supported with voters. Yet the beleaguered centrist government – though desperate to cut its budget deficit – refuses to contemplate 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. Acrimonious recent disputes over pension cutbacks 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 happily exploited to promote a politics of welfare chauvinism. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has said that it would target any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Populists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as subsequent Medicaid cuts and tax breaks for the wealthy demonstrated. Yet without a convincing progressive alternative from the Harris campaign, they proved effective on the election circuit. Without a radical shift in fiscal policy, social contracts across the continent risk being torn apart. Governments must steer clear of giving this political gift to the Trumpian forces already on the march in Europe.