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Over a year after the election that handed Donald Trump a clear-cut return victory, the Democratic party has still not released its election autopsy. But, recently, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers argued, did not resonate with core constituencies because it did not focus enough on tackling basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Warning for European Capitals

As the EU braces for a tumultuous period 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 newly released national security strategy makes clear, is optimistic that “nationalist movements in Europe will quickly mirror Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by large swaths of working-class voters. Yet among establishment politicians and parties, it is difficult to see a strategy that is sufficient to challenging times.

Major Problems and Expensive Solutions

The issues Europe faces are costly and historic. They encompass the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to pressure by Mr Trump and China. According to a Brussels-based thinktank, the new age of geopolitical insecurity could require an additional €250bn in yearly EU defence spending. A significant study last year on European economic competitiveness called for massive investment in public goods, to be partly funded by collective EU debt.

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

But, at both the EU-wide and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “frugal” nations oppose 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 widely supported with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Cost of Political Paralysis

The reality is that in the absence of such measures, the less well-off will pay the price of financial adjustment through austerity budgets and increased inequality. Acrimonious recent disputes over pension cutbacks 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 welfare chauvinism. 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 blue‑collar interests were deeply disingenuous, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. Yet in the absence of a compelling progressive alternative from the Harris campaign, they worked on the campaign trail. Without a fundamental change in fiscal policy, social contracts across the continent risk being ripped up. Policymakers must steer clear of handing this electoral boon to the populist movements already on the march in Europe.