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More than a year after the vote that handed Donald Trump a decisive return victory, the Democratic party has still not released its election autopsy. However, last week, an prominent progressive lobby group published its own. Kamala Harris's campaign, its writers contended, did not resonate 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, progressives neglected the bread-and-butter issues that were foremost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a tumultuous period of politics between now and the end of the decade, that is a message that must be fully absorbed in European capitals. The White House, as its recently published national security strategy indicates, is hopeful that “nationalist movements in Europe will soon mirror Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by significant segments of working-class voters. But among mainstream leaders and parties, it is difficult to see a strategy that is adequate to troubling times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are costly and historic. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and developing economies that are less vulnerable to bullying by Mr Trump and China. According to a Brussels-based research institute, the new age of global instability could necessitate an additional €250bn in yearly EU defence spending. A major study last year on European economic competitiveness called for substantial investment in public goods, to be partly funded by collective EU debt.

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

But, at both the EU-wide and national levels, there remains a lack of boldness when it comes to generating funds. The EU’s so-called “budget hawks 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 – will not consider such a move.

The Price of Inaction

The truth is that without such measures, the less well-off will pay the price of financial adjustment through austerity budgets and increased inequality. Acrimonious recent conflicts over pension cutbacks in both France and Germany testify to a developing struggle 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 opposed moves to raise the retirement age and has said that it would target any benefit cuts at non-French nationals.

Preventing a Political Gift for Populists

In the US, Mr Trump’s promises to protect working-class interests were largely insincere, as later healthcare reductions and tax breaks for the wealthy demonstrated. But without a convincing progressive alternative from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in economic approach, social contracts across the continent risk being torn apart. Policymakers must avoid handing this electoral boon to the Trumpian forces already on the march in Europe.