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More than a twelve months following the election that handed Donald Trump a decisive comeback victory, the Democratic Party has yet to released its postmortem analysis. But, last week, an prominent progressive lobby group released its own. Kamala Harris's campaign, its authors argued, failed to connect with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. By prioritising the threat to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for European Capitals

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a message that must be fully absorbed in European capitals. The White House, as its newly released national security strategy indicates, is optimistic that “patriotic” parties in Europe will soon replicate Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by large swaths of blue-collar voters. But among mainstream leaders and parties, it is difficult to see a strategy that is adequate to challenging times.

Era-Defining Challenges and Expensive Solutions

The challenges Europe faces are costly and era-defining. They encompass the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and developing economies that are more resilient to pressure by Mr Trump and China. As per a Brussels-based thinktank, the new age of global instability could necessitate an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness demanded substantial investment in public goods, to be financed in part by collective EU debt.

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

However, 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 “frugal” nations oppose the idea of collective borrowing, and EU spending plans for the next seven years are deeply unambitious. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. Yet the beleaguered centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Political Paralysis

The truth is that in the absence of such measures, the less affluent will pay the price of fiscal tightening through austerity budgets and greater inequality. Acrimonious recent conflicts over pension cutbacks in both France and Germany testify to a growing battle 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 non-French nationals.

Preventing a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were largely insincere, as later healthcare reductions and tax breaks for the wealthy demonstrated. Yet without a convincing progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Absent a fundamental change in economic approach, societal agreements across the continent risk being torn apart. Governments must avoid handing this political gift to the populist movements already on the rise in Europe.