ASSESSMENTS

Political Risk Is on the Rise in Europe. Here's Why.

Apr 25, 2019 | 17:57 GMT

Albert Rivera, center, leader of Spain's center-right Ciudadanos (Citizens) party, leads a campaign rally in Renteria on April 14, 2019. Spain holds a general election on April 28, its third in less than four years.

(ANDER GILLENEA/AFP/Getty Images)

Highlights

Recent election results suggest that the political landscape in several European countries is fragmenting. This fragmentation will make general elections harder to predict and slow the formation of new governments.
Government coalitions will likely become more heterogeneous, which in turn will lead to more complex policymaking.
These developments will increase uncertainty about the policy direction of countries, leading to higher political risk across the Continent.
Increasing political volatility at home will make it harder for governments to participate in decisions at the continental level, potentially slowing the decision-making process in the European Union.

European politics has entered a period of political fragmentation. Across the Continent, mainstream political parties are losing ground to new competitors, parliaments are becoming more atomized, negotiations to form governments are taking longer and the overall policy direction of countries is getting harder to predict. This development is increasing political risk across the Continent, as companies, institutions and households are forced to operate in a political atmosphere that is becoming harder and harder to read....

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