Large asset managers are scaling back their exposure to Poland over fears that a political stand-off between the country’s maverick new government and Brussels has undermined the investment case for the EU’s eighth-largest economy. Investor concern about Poland’s economic prospects heightened this month after the European Commission issued an unprecedented opinion stating that the country’s Eurosceptic, conservative government is endangering the rule of law.

This criticism has opened the door for possible sanctions or funding restrictions for Warsaw and has caused investors to accelerate withdrawals from funds exposed to the region.

Assets managed by two exchange traded funds that track the Polish stock market have fallen dramatically since the Law and Justice party was elected last October.

The iShares MSCI Poland Capped ETF, run by BlackRock, the world’s largest asset manager, has lost almost a sixth of its assets since April, falling to $183m.

The VanEck Vectors Poland ETF has lost almost a third of its assets since October, falling to $13.5m.