The populist revolt is far from over in Europe

The crisis in Spain over Catalonia's threatened secession is just "the latest expression of a developing, Europe-wide crisis of political legitimacy", says The Observer. A new problem has cropped up in eastern Europe. A pro-Russia billionaire deemed the Czech version of Donald Trump leads the largest party after last week's national elections. Andrej Babis is opposed to EU migration policies and may now form a coalition with another populist group, the Freedom and Democracy party, which has said it wants to quit the EU.

"This is an earthquake a total revolt against the established parties," Milan Nic of the German Council on Foreign Relations told The Times. It will also bolster the campaign by Poland, Slovakia and Hungary to form a united front against Brussels.

Austria's new chancellor, Sebastian Kurz, is also talking tough on immigration and more sympathetic to this grouping than his predecessor. To what extent political ructions in eastern Europe will hamper regional economies is hard to gauge, but they certainly come at an awkward time.

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The region is enjoying its fastest growth in six years on the back of the eurozone's economic revival. According to Capital Economics, emerging Europe (including Russia and Turkey) will expand by 3.5% this year, but dwindling spare capacity in the heavyweight economies of central Europe notably Poland, Hungary, and the Czech Republic indicates higher interest rates, tempering overall growth.

The region's GDP growth will slip below 3% next year. Bulls point to cheaper valuations and higher dividends than in developed markets, while the regional index is still 40% off its pre-crisis peak, implying ample catch-up potential. But peaking growth and increasingly fraught politics may prove strong headwinds.