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More than a twelve months following the vote that delivered Donald Trump a decisive comeback victory, the Democratic party has still not released its election autopsy. But, last week, an influential liberal advocacy organization published its own. Kamala Harris's campaign, its writers argued, failed to connect with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. In focusing on the threat to democracy that Maga authoritarianism represented, liberals neglected the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for European Capitals

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a lesson that needs to 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 replicate Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of working-class voters. Yet among establishment politicians and parties, it is hard to discern a response that is adequate to challenging times.

Era-Defining Challenges and Costly Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a Brussels-based thinktank, the new age of geopolitical insecurity could necessitate an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness demanded massive investment in public goods, to be partly funded by jointly held EU debt.

Such a fiscal paradigm shift would stimulate 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 resist the idea of collective borrowing, and EU spending plans for the next seven years are deeply unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Political Paralysis

The truth is that in the absence of such measures, the less well-off will pay the price of fiscal tightening through austerity budgets 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 welfare state – a trend 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 resisted moves to raise the retirement age and has stated that it would target any benefit cuts at non-French nationals.

Avoiding a Political Gift for Populists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy underlined. Yet in the absence of a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Absent a fundamental change in fiscal policy, social contracts across the continent risk being ripped up. Governments must steer clear of handing this political gift to the Trumpian forces already on the march in Europe.