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Over a year after the election that delivered Donald Trump a clear-cut comeback victory, the Democratic party has yet to released its election autopsy. But, last week, an influential liberal advocacy organization published its own. The Harris campaign, its authors contended, did not resonate with key voter blocs because it failed to concentrate enough on addressing basic economic anxieties. By prioritising the menace to democracy that Maga authoritarianism represented, liberals overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a turbulent era 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 recently published national security strategy indicates, is optimistic that “nationalist movements in Europe will soon replicate Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by large swaths of blue-collar voters. But among establishment politicians and parties, it is difficult to see a strategy that is sufficient to troubling times.

Era-Defining Challenges and Costly Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and developing economies that are more resilient to pressure by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could require an additional €250bn in annual EU defence spending. A significant report last year on European economic competitiveness called for substantial investment in public goods, to be partly funded by collective EU debt.

Such a fiscal paradigm shift would boost growth figures that have flatlined for years.

However, at both the pan-European 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 Brussels’ budget proposals for the next seven years are deeply timid. 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 – refuses to contemplate such a move.

The Price of Inaction

The truth 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 pension cutbacks in both France and Germany testify to a developing struggle over the future of the European social model – 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 said that it would focus any benefit cuts at foreign residents.

Avoiding a Political Gift for Nationalists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as subsequent healthcare reductions and fiscal benefits for the wealthy underlined. But in the absence of a compelling progressive counteroffer from the Harris campaign, they worked on the campaign trail. Absent a fundamental change in fiscal policy, social contracts across the continent are in danger of being torn apart. Governments must steer clear of giving this political gift to the populist movements already on the rise in Europe.