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More than a twelve months after the vote that delivered Donald Trump a decisive return victory, the Democratic Party has still not released its election autopsy. But, last week, an prominent progressive lobby group published its own. Kamala Harris's campaign, its authors argued, did not resonate with core constituencies because it failed to concentrate enough on tackling basic economic anxieties. By prioritising the menace to democracy that Trumpist populism represented, progressives neglected the bread-and-butter issues that were foremost in many people’s minds.

A Warning for Europe

As the EU braces for a turbulent era of politics between now and the end of the decade, that is a message that needs to be fully understood in European capitals. The White House, as its recently published national security strategy makes clear, is optimistic that “patriotic” parties in Europe will soon replicate Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by significant segments of working-class voters. Yet among establishment politicians and parties, it is hard to discern a response that is sufficient to challenging times.

Major Challenges and Costly Solutions

The challenges Europe faces are costly and historic. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient to pressure by Mr Trump and China. According to a Brussels-based thinktank, the new age of global instability could require an additional €250bn in annual EU defence spending. A major study last year on European economic competitiveness called for massive investment in public goods, to be partly funded by collective EU debt.

Such a fiscal paradigm shift would stimulate growth figures that have stagnated for years.

However, at both the pan-European 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 shared debt, and Brussels’ budget proposals for the next seven years are deeply unambitious. In France, the idea of a tax on the super-rich is widely supported 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 without such measures, the less affluent will bear the brunt of financial adjustment through austerity budgets and greater inequality. Bitter recent conflicts over pension cutbacks in both France and Germany testify to a developing struggle over the future of the European welfare state – 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 target any benefit cuts at non-French nationals.

Preventing a Strategic Advantage for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy demonstrated. Yet in the absence of a compelling progressive alternative from the Harris campaign, they proved effective on the campaign trail. Without a radical shift in fiscal policy, social contracts across the continent risk being ripped up. Policymakers must steer clear of handing this political gift to the populist movements already on the march in Europe.