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More than a year 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 progressive lobby group released its own. Kamala Harris's campaign, its authors contended, failed to connect with key voter blocs because it failed to concentrate enough on addressing everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, liberals overlooked the kitchen-table concerns that were uppermost in many people’s minds.

A Warning for Europe

While Europe prepares for a tumultuous period of politics between now and the end of the decade, that is a lesson that needs to be fully understood in European capitals. The White House, as its newly released national security strategy makes clear, is hopeful that “nationalist movements in Europe will quickly replicate Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, supported by large swaths of blue-collar voters. Yet among mainstream leaders and parties, it is difficult to see a response that is adequate to troubling times.

Major Problems and Costly Solutions

The challenges Europe faces are costly and historic. They include the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and developing economies that are less vulnerable to bullying 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 report last year on European economic competitiveness called for massive investment in shared infrastructure, to be financed in part by collective EU debt.

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

But, at both the pan-European and national levels, there continues to be a deficit of courage when it comes to generating funds. The EU’s so-called “frugal” nations oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are profoundly unambitious. In France, the idea of a tax on the super-rich 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 truth is that in the absence of such measures, the less well-off will pay the price of financial adjustment through austerity budgets and increased inequality. Bitter recent conflicts over retirement reforms in both France and Germany highlight a growing battle over the future of the European social model – a phenomenon that the RN and the AfD have happily exploited 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 target any benefit cuts at foreign residents.

Preventing a Political Gift for Nationalists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy underlined. But without a compelling progressive alternative from the Harris campaign, they proved effective on the election circuit. Absent a fundamental change in fiscal policy, social contracts across the continent risk being torn apart. Governments must avoid giving this political gift to the populist movements already on the march in Europe.