What is a concern, though, is the fact that these nationalistic, anti-immigrant parties are gaining ground in the first place. There’s clearly a trend toward populism, which has partly been driven by high-profile terrorist attacks in France and Germany, economic malaise in certain countries and right-wing politicians lambasting the European Union. In the Netherlands, the far-right party candidate Geert Wilders is currently the front-runner in a vote that will be the latest test for the antiestablishment sentiment currently sweeping the globe.
It’s unlikely we’ll see much fallout in the short term, but it could be a significant issue over the long term, ClearBridge’s Schulze said. If economic inequality between northern and southern Europe worsens, then people could rise up, borders could close, and more countries could leave the Euro zone.
Nationalism hurts Europe’s economy and its stock markets, Raschkowan said. Hungary, Poland and Turkey have already started taking a more hard-line approach to immigration, and that’s undermining its economic potential, he said. Poland’s GDP growth, for instance, is expected to grow at its slowest pace since 2013. While these countries may not get the attention that other European nations do, there is worry that their nationalistic policies could spread.