The discussion of the political implications of the influx of refugees to Europe took place during a roundtable event co-hosted today by Carrier and Guy Huntrods, RBC’s head of investment counsellors.
According to Carrier, the refugee crisis highlights the difficulty of cooperation between the affected European countries. It could also undermine the free movement of labour within the region, she said.
Carrier also warned that the crisis could potentially increase the risk of a ‘Brexit’, as it undermines the willingness of the United Kingdom to stay in the European Union. Furthermore, general elections are taking place in both France and Germany in 2017.
The anti-immigration parties in the EU tend to be anti-EU as well, which means they would be reluctant to put through reforms, said Carrier.
“It’s rare that geopolitical risks have a long lasting impact on financial markets,” said Carrier. “Nevertheless, the ongoing refugee crisis in Europe highlights a broader issue at play in the EU, namely the difficulties that European governments have in reaching consensus, which is ominous for a system based on cooperation. This lack of cooperation could also arguably increase the risk of a Brexit as it may undermine the UK’s negotiations with the Eurozone, or potentially erode public support for staying in the EU, or perhaps both,” Carrier added.
The speakers also noted that volatility itself is not a risk however, as it can provide opportunities.
