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More than a twelve months after the election that handed Donald Trump a decisive comeback victory, the Democratic party has still not released its election autopsy. However, last week, an prominent 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 addressing basic economic anxieties. In focusing on the menace to democracy that Trumpist populism 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 lesson that must be fully understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy makes clear, is optimistic that “nationalist movements in Europe will soon replicate Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by large swaths of working-class voters. Yet among mainstream leaders and parties, it is hard to discern a response that is adequate to troubling times.

Major Problems and Expensive Solutions

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

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

But, at both the EU-wide and national levels, there continues to be a lack of boldness 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 deeply unambitious. In France, the idea of a wealth tax is widely supported with voters. But the beleaguered centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The reality is that in the absence of such measures, the less well-off will pay the price of financial adjustment through spending cuts and greater inequality. Bitter recent conflicts over retirement reforms in both France and Germany highlight a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have eagerly leveraged to promote a politics of nativist social policy. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has stated that it would focus any benefit cuts at foreign residents.

Preventing a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy underlined. But in the absence of a convincing progressive alternative from the Harris campaign, they proved effective on the election circuit. Absent a fundamental change in fiscal policy, societal agreements across the continent risk being ripped up. Governments must avoid handing this political gift to the populist movements already on the rise in Europe.