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Over a twelve months following the election that handed Donald Trump a clear-cut comeback victory, the Democratic party has yet to issued its election autopsy. But, recently, an influential liberal advocacy organization 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 menace to democracy that Maga authoritarianism represented, liberals neglected the bread-and-butter issues that were foremost 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 indicates, is optimistic that “patriotic” parties in Europe will quickly 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, backed by significant segments of working-class voters. But among establishment politicians and parties, it is hard to discern a strategy that is adequate to challenging times.

Era-Defining Problems and Costly Solutions

The challenges Europe faces are expensive and era-defining. 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 bullying by Mr Trump and China. As per a European thinktank, the new age of geopolitical insecurity could necessitate an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness called for massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

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

However, at both the pan-European and national levels, there remains a deficit of courage when it comes to generating funds. The EU’s so-called “frugal” nations oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are profoundly unambitious. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. Yet the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The reality is that without such measures, the less affluent will pay the price of financial adjustment 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 social model – a phenomenon that the RN and the AfD have eagerly leveraged to promote a politics of nativist social policy. 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.

Avoiding a Strategic Advantage for Populists

Across the Atlantic, Mr Trump’s promises to protect blue‑collar interests were largely insincere, as subsequent healthcare reductions and fiscal benefits for the wealthy underlined. But without a convincing progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in fiscal policy, social contracts across the continent are in danger of being ripped up. Governments must avoid handing this political gift to the populist movements already on the rise in Europe.