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Over a year following the vote that handed Donald Trump a decisive comeback victory, the Democratic Party has yet to released its election autopsy. But, recently, an influential liberal advocacy organization released its own. The Harris campaign, its writers argued, did not resonate with key voter blocs because it failed to concentrate enough on addressing basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were foremost in many people’s minds.

A Warning for Europe

As the EU braces for a tumultuous period of politics from now until the end of the decade, that is a lesson that must be fully understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is hopeful that “nationalist movements in Europe will quickly mirror Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by significant segments of blue-collar voters. Yet among establishment politicians and parties, it is difficult to see a response that is sufficient to troubling times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and building economies that are more resilient to pressure by Mr Trump and China. As per a European thinktank, the new age of global instability could require an additional €250bn in yearly EU defence spending. A significant report last year on European economic competitiveness demanded substantial investment in public goods, to be financed in part by jointly held EU debt.

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

But, at both the EU-wide and national levels, there remains a lack of boldness when it comes to revenue raising. The EU’s so-called “budget hawks oppose the idea of shared debt, and EU spending plans for the next seven years are profoundly unambitious. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. But the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Price of Political Paralysis

The reality is that without such measures, the less affluent will bear the brunt of fiscal tightening through spending cuts 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 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 stated that it would target any benefit cuts at non-French nationals.

Avoiding a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as subsequent healthcare reductions and fiscal benefits for the wealthy demonstrated. But in the absence of a compelling progressive alternative from the Harris campaign, they worked on the campaign trail. Without a fundamental change in economic approach, social contracts across the continent risk being torn apart. Policymakers must avoid giving this political gift to the populist movements already on the rise in Europe.