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Over a year after the election that handed Donald Trump a clear-cut comeback victory, the Democratic Party has still not issued its postmortem analysis. But, recently, an prominent liberal advocacy organization published its own. Kamala Harris's campaign, its authors argued, failed to connect with core constituencies because it did not focus enough on addressing basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were uppermost 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 needs to be fully understood in Brussels, Paris and Berlin. 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. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by large swaths of working-class voters. Yet among establishment politicians and parties, it is hard to discern a strategy that is sufficient to troubling times.

Era-Defining Problems and Expensive Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and developing economies that are less vulnerable to bullying by Mr Trump and China. As per a European research institute, the new age of global instability could necessitate an additional €250bn in annual EU defence spending. A significant report last year on European economic competitiveness demanded massive investment in shared infrastructure, to be partly funded by collective EU debt.

Such a fiscal paradigm shift would boost growth figures that have flatlined for years.

But, 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 “budget hawks oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are deeply timid. In France, the idea of a wealth tax is widely supported with voters. But the beleaguered centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The reality is that in the absence of such measures, the less well-off will bear the brunt of financial adjustment through austerity budgets and increased inequality. Acrimonious recent conflicts over retirement reforms in both France and Germany highlight 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 nativist social policy. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has said that it would focus any benefit cuts at foreign residents.

Avoiding a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were deeply disingenuous, as later healthcare reductions and fiscal benefits for the wealthy underlined. Yet without a convincing progressive alternative from the Harris campaign, they worked on the campaign trail. Absent a radical shift in economic approach, social contracts across the continent risk being ripped up. Governments must steer clear of giving this political gift to the Trumpian forces already on the march in Europe.