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More than a year after the election that handed Donald Trump a clear-cut comeback victory, the Democratic party has still not issued its postmortem analysis. However, recently, an influential liberal advocacy organization released its own. Kamala Harris's campaign, its authors argued, did not resonate with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, liberals overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Lesson for Europe

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a message that needs to be fully understood in European capitals. The White House, as its recently published national security strategy indicates, is hopeful that “patriotic” parties in Europe will soon replicate Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top 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 sufficient to troubling times.

Era-Defining Challenges and Expensive Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and building economies that are more resilient to pressure by Mr Trump and China. As per a Brussels-based research institute, the new age of global instability could require an additional €250bn in yearly EU defence spending. A major study last year on European economic competitiveness demanded massive investment in shared infrastructure, to be financed in part by collective EU debt.

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

But, at both the EU-wide and national levels, there remains a deficit of courage when it comes to revenue raising. The EU’s so-called “budget hawks resist the idea of collective borrowing, and EU spending plans for the next seven years are profoundly timid. 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 without such measures, the less well-off will pay the price of fiscal tightening through austerity budgets and increased inequality. Bitter recent disputes over retirement reforms in both France and Germany highlight 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 nativist social policy. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has stated that it would focus any benefit cuts at foreign residents.

Preventing a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as subsequent healthcare reductions and tax breaks for the wealthy underlined. Yet without a convincing progressive alternative from the Harris campaign, they proved effective on the campaign trail. Without a fundamental change in economic approach, societal agreements across the continent risk being ripped up. Governments must steer clear of giving this electoral boon to the populist movements already on the rise in Europe.