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Over a year after the vote that handed Donald Trump a decisive comeback victory, the Democratic party has still not released its postmortem analysis. However, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers contended, failed to connect with key voter blocs because it did not focus enough on addressing everyday financial worries. In focusing on the menace to democracy that Maga authoritarianism represented, progressives overlooked the bread-and-butter issues that were uppermost 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 needs to 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. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by significant segments of blue-collar voters. But among mainstream leaders and parties, it is hard to discern a strategy that is adequate to challenging times.

Era-Defining Challenges and Costly 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 more resilient to bullying by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could require an additional €250bn in yearly EU defence spending. A major study last year on European economic competitiveness demanded massive investment in shared infrastructure, to be partly funded by jointly held EU debt.

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

However, at both the EU-wide and national levels, there remains a deficit of courage 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 Cost of Political Paralysis

The truth is that without such measures, the less well-off will pay the price of financial adjustment through austerity budgets and increased inequality. Bitter recent disputes 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 eagerly leveraged to promote a politics of nativist social policy. 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 Populists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy underlined. Yet without a convincing progressive counteroffer 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 giving this electoral boon to the populist movements already on the rise in Europe.