also a working definition of racism is discrimination (legal or otherwise) of a person based on her race, ethinicity or religion. You can discriminate against someone because he/she has done bad things, or has violent tendencies, or simply because he/she is stupid etc. (the latter being called mentalism for example), those are not as problematic. But if you discriminate based only on race, ethnicity or religion that causes a lot of problems.

Racism actually is not necessarily a problem in itself. But europe has had experience with it, and has decided to never practice it again. Because it doesn't work, and it causes massive social issues. I think the institutional policy against racism is part of the effort to not go down that road again.