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Over a year after the election that delivered Donald Trump a decisive return victory, the Democratic party has still not released its election autopsy. However, last week, an prominent liberal advocacy organization released its own. The Harris campaign, its writers contended, failed to connect with core constituencies because it did not focus enough on addressing everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, progressives 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 turbulent era of politics between now and the end of the decade, that is a message that needs to be fully absorbed in European capitals. The White House, as its newly released national security strategy indicates, is hopeful that “patriotic” parties 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) lead the polls, backed by significant segments of working-class voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is adequate to troubling times.

Major Challenges and Expensive Solutions

The challenges Europe faces are costly and historic. They include the war in Ukraine, maintaining the momentum of the green transition, addressing 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 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 stagnated for years.

However, at both the EU-wide 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 profoundly unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Inaction

The truth is that without such measures, the less well-off will bear the brunt of fiscal tightening through spending cuts and increased inequality. Bitter recent conflicts over retirement reforms in both France and Germany testify to a developing struggle over the future of the European social model – a phenomenon that the RN and the AfD have eagerly leveraged 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 foreign residents.

Preventing 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 demonstrated. But without a convincing progressive counteroffer from the Harris campaign, they worked on the election circuit. Absent a radical shift in economic approach, societal agreements across the continent are in danger of being ripped up. Policymakers must avoid handing this political gift to the populist movements already on the march in Europe.