Further economic and political integration in European Union is under threat from "heightened uncertainty" over the outcome of European elections in 2017, according to Moody's.

In a report for its clients, the global ratings agency went as far as to say that further integration is "unlikely for the foreseeable future" as governments in the bloc focus on shoring up domestic support.

Moody's does not expect anti-consensus parties – including those campaigning on anti-EU or anti-euro policy platforms – to form outright governments or hold executive power following elections, with critical polls in France, Germany and the Netherlands due in 2017.

However, the agency believes the trend of heightened credit market volatility during elections which have seen rising support for anti-EU agendas, particularly since 2009, highlights downside risks to capital market financing conditions in 2017, at least "over the short term."

Colin Ellis, Moody's managing director and co-author of the report, said the elections are taking place against a backdrop of rising challenges to the political status quo and the declining popularity of governing political parties.

"These elections have the potential to shape the future of regional integration, weigh on economic growth and stoke financial market volatility. While there are no immediate [credit/sovereign] rating implications, such developments would be clearly credit negative as they have the potential to weaken EU sovereigns' economic and institutional strength."

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Moody's also noted that risks of traditionally centrist parties becoming "more focused on shoring up political support" before or after election cycles than pursuing unpopular economic and fiscal reforms, either at a national or regional level, are material.

The credit implication of such a scenario is that large economic imbalances amongst member countries are likely to endure, leaving "the region vulnerable to recurrent future crises," the agency warned.

Finally, Moody's also concluded that concerns over future economic policy direction may "negatively affect business confidence and investment" in countries where anti-consensus parties are gaining momentum, weighing on the region's already weak growth.