The economic situation in Europe is bleak. The continent that represents almost one-fifth of the world’s total economic output is now looking squarely at the prospect of its third recession in just six years. But the consequences, including the political instability that could result, would be felt far beyond the European continent itself.

To see just how stark the problems are, one only has to look at the predicament of the eurozone’s two largest economies: France and Germany. Having grown by 0.7 percent in the first months of 2014, the German economy then shrank by 0.2 percent between April and June. German industrial output is down by 4 percent, exports are down 5.8 percent. And France too is in trouble. Since 2008 France’s economy has grown by just 0.3 percent and no great increase is predicted for the coming year. This is a poor performance from both economies when one looks across the channel to Britain where—free from the Euro and the constraints set by Brussels—economic growth is expected to stand at 3.2 percent by the end of the year. And while the eurozone struggles to shake off its stubborn unemployment rate of 11.5 percent, unemployment in the UK is currently at 6 percent.

The situation in France and Germany may be bad, but the eurozone harbors other horror stories. Most infamous of course is Greece. There the economy is burdened by a debt equivalent to 175 percent of GDP. Then there are countries such as Spain and Italy where youth unemployment languishes at 40 percent. In Portugal the situation is only a little better, although there at least the imposition of greater fiscal responsibility has seen a slight reduction in unemployment and some forecasts for better growth next year. There has been no such fiscal responsibility in France, however. In that country, where the state already accounts for 56 percent of GDP, high government spending is going to see France yet again flout EU regulations on the budget deficit.

The violent riots that rocked Athens in 2011 were only the most immediately visible consequence of the ongoing economic hardships afflicting many European societies. While Europe’s political class appears to have pursued a business-as-usual attitude, beneath the surface there have been the stirrings of extremist forces that will not tolerate the status quo for a great deal longer.

Concrete evidence of the kind of radical movements that are afoot came with the elections to Europe’s parliament last May. Parties vocally hostile to the entire European project topped the polls in several countries, but more alarming was the fact that a number of these parties espouse the kind of extreme views that once would have banished them from the realms of acceptability for most voters. In France Marine le Penn’s Front Nationale came in first place; this is a party that many believe is still be mired in its racist and neo-fascist past. Similarly, Austria’s right-wing Freedom party saw a doubling in the number of seats it won, whereas Spain and Portugal saw gains for the far left. And in Greece there was a rush to both ends of the political extremes, with the Coalition of the Radical Left (SYRIZA) winning first place and the neo-Nazi Golden Dawn coming third, taking 10 percent of the vote and 3 of the 21 seats allotted to Greece in the European parliament.

The kind of sinister resentments with which these parties are associated were most overtly evidenced by the anti-Jewish riots witnessed in Paris over the summer. Not that the resurgence of European anti-Semitism can be explained away as a primarily economic phenomenon–the culture of hostility toward Israel has been brewing for some decades now. Yet it also seems quite conceivable that the conspiratorial messages pushed by those such as the anti-Semitic French comedian Dieudonne will have an added resonance with a population that is experiencing the kind of deep frustrations that are now common among many young people in France.

Finally, if Europe’s economic situation does continue to worsen, and does so over a sustained period, this will inevitably begin to impact Europe’s influence on the world stage. Long unwilling to employ military intervention, European diplomats seem to believe that economic sanctions are their secret weapon. Sanctions were what Europe instinctively reached for during the Russian invasion of Ukraine. And there have of course been increasing murmurings of Brussels setting Israel red lines which if crossed would incur sanctions. Yet European business has already been kicking back against the sanctions disrupting their trade with Iran as it is.

Should the eurozone economies continue to founder, then the constant recourse to sanctions may become an increasingly unpalatable option for Europe’s politicians. Besides, with stirrings of unrest and extremism at home, European statesmen may soon find they have their own more pressing concerns. Still, the temptation to find distractions and scapegoats will likely only increase if the European economies continue to stagnate.

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