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Over a year after the election that handed Donald Trump a decisive comeback victory, the Democratic party has still not issued its postmortem analysis. However, last week, an prominent liberal advocacy organization released its own. The Harris campaign, its writers contended, did not resonate with key voter blocs because it did not focus 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

While Europe prepares for a turbulent era of politics between now and the end of the decade, that is a message that must be fully understood in European capitals. The White House, as its newly released national security strategy makes clear, is optimistic that “patriotic” parties 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) lead the polls, backed by significant segments of working-class voters. But among establishment politicians and parties, it is hard to discern a response that is sufficient to challenging times.

Era-Defining Challenges and Expensive Solutions

The challenges Europe faces are costly and historic. 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 bullying by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could necessitate an additional €250bn in annual EU defence spending. A major report last year on European economic competitiveness demanded massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

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

But, at both the pan-European and national levels, there remains a lack of boldness when it comes to revenue raising. The EU’s so-called “frugal” nations oppose 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. But the beleaguered centrist government – though 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 financial adjustment through austerity budgets and greater inequality. Acrimonious recent conflicts over retirement reforms 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 happily exploited to promote a politics of welfare chauvinism. 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 non-French nationals.

Avoiding a Strategic Advantage for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were largely insincere, as subsequent Medicaid cuts and tax breaks for the wealthy underlined. Yet in the absence of a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Absent a radical shift in fiscal policy, social contracts across the continent risk being torn apart. Governments must steer clear of giving this political gift to the Trumpian forces already on the march in Europe.