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More than a twelve months following the election that delivered Donald Trump a decisive return victory, the Democratic party has still not released its election autopsy. But, last week, an influential liberal advocacy organization released its own. The Harris campaign, its authors argued, failed to connect with key voter blocs because it failed to concentrate enough on tackling everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, liberals overlooked the kitchen-table concerns that were foremost in many people’s minds.

A Warning for European Capitals

As the EU braces for a turbulent era of politics from now until the end of the decade, that is a lesson that needs to be fully absorbed 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 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. Yet among establishment politicians and parties, it is difficult to see a strategy that is sufficient to troubling times.

Major Challenges 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 developing economies that are less vulnerable to pressure by Mr Trump and China. According to a Brussels-based research institute, the new age of global instability could necessitate an additional €250bn in annual EU defence spending. A significant 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.

However, at both the EU-wide and national levels, there continues to be a deficit of courage when it comes to revenue raising. 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 tax on the super-rich 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 truth is that in the absence of such measures, the less affluent will pay the price of financial adjustment through austerity budgets and greater inequality. Acrimonious recent disputes over pension cutbacks in both France and Germany highlight a developing struggle over the future of the European welfare state – 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 foreign residents.

Preventing a Political Gift for Populists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as later healthcare reductions and tax breaks for the wealthy underlined. But in the absence of a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Absent a fundamental change in economic approach, societal agreements across the continent are in danger of being ripped up. Governments must steer clear of handing this electoral boon to the populist movements already on the rise in Europe.