The results of the recent Spanish election confirms something that Stratfor has been tracking for some time. Namely, the trend of political fragmentation in Europe. As we said on April 25, 2019, in Political Risk Is on the Rise in Europe:
Across the Continent, there is a widespread feeling that the traditional political forces are out of touch with the reality of millions of families, and voters are looking for new options. The economic crisis of the 2010s damaged the popularity of mainstream political parties and contributed to the emergence of new, sometimes anti-establishment, political forces on the right and the left.
In Europe, political risk — and its close connection to economic risk — is here to stay.
The immigration crisis has also contributed to the emergence of nationalist and anti-immigration parties across the Continent. The emergence of more extremist parties has forced centrist parties to move further to the right or to the left to compete, deepening polarization in many countries. This phenomenon is not exclusive to the European Union. In Norway, which is not a member of the Continental bloc, the data also shows that the political landscape has become more fragmented.
The consequences of Europe's political fragmentation are already visible in several countries. In the coming years, the social, economic and political ramifications of these trends are likely to continue or even increase, especially as many of the Continent's largest economies are starting to slow down. (Italy is in a recession, while Germany recently lowered its growth prediction for 2019.) In Europe, political risk, and its close connection to economic risk, is here to stay.
