Why has Iceland returned to the politicians who caused their crisis?

The centre-right's victory masks growing disaffection with politics.

As Iceland re-elects the parties that led it into the financial crisis and Italy forms its broadest coalition since 1946 to the sound of gunfire, something strange is afoot in European politics. As the economic crisis rumbles on past the five-year mark, traditional party systems across the continent are under strain and contorting themselves into ever-more unusual arrangements to meet the challenge posed by the plunging living standards of their electorates.

In retrospect Britain, which elected its first coalition since World War II in 2010, now looks like a trend-setter. Everywhere one looks across the continent, the financial crisis has upended the old patterns of politics. The "grand coalition" of left and right in Italy is only the latest example of political parties closing ranks against threats to their traditional position – in this case, economic woe and a surge by the anti-establishment Five Star Movement, which may be led by a comedian but proved it was no joke by garnering over 25 per cent of the vote in February’s election.

Meanwhile in Iceland, voters have just returned the centre right to power in the form of the Progressive Party and the Independence Party. These are the parties many blame for getting them into a financial mess in the first place. It was Independence Party Prime Minister David Oddsson who gave Iceland its version of the City’s "big bang" and was central bank governor when the financial crisis struck. That voters would turn back to these old hands – much less in the biggest electoral swing in Iceland’s independent history – is, to put it mildly, a sign of some desperation.

The head of Iceland's Pirate Party – another anti-establishment force which just won its first seats in a national legislature, becoming the first Pirate Party to do so – was rueful about the return of the centre right. "It is the problem of the leftwing," said Birgitta Jonsdottir, a Pirate Party MP. "They clean up the vomit after the cocaine party of the neocons, who go into rehab and then come back to reap the benefits." But the very success of her own movement is a sign of something else – outsiders are increasingly crashing the party.

Europe's national governments all share a basic impotence in the face of the economic crisis and the austerity consensus imposed from Brussels, Berlin and the bond markets. Even Iceland, which has its own currency, is not fully ruler in its own house – and the outgoing government had received many plaudits from outsiders like the IMF. The exact party configurations ruling in each capital are, to an extent, besides the point in the face of this external pressure. Witness how France’s first Socialist government in twenty years is now planning to slash capital gains tax to attract businesses.

This impotence is leading to a general decline of established party systems across Europe. Voters are realising that none of the traditional parties can fundamentally challenge the austerity consensus, and are turning to outsiders who might. Italy's Five Star Movement is one example. Greece's Coalition of the Radical Left (Syriza), which is now the second-biggest party in the country’s legislature, is another. Even UKIP is capitalising on the mess on the continent and economic fears here at home to shake up the British political scene.

As austerity passes into its second half-decade – and as forecasts for when it will come to an end are pushed further into the future – the strain on Europe’s traditional parties will increasingly show.  If Italy’s broadest coalition since World War II and Iceland’s establishment parties cannot deliver economic security to their voters – and there seems little reason to think they can – then what happens next will be unpredictable.  Voters are running out of options near the traditional centres of their politics.

All of this poses the greatest long-term threat to the austerity consensus across Europe, as perhaps leading figures in Brussels and Berlin are starting to realise as they rhetorically distance themselves from austerity and start to talk about how, as Jose Manuel Barroso said recently, the policy has reached the limits of its popular support. But the pull of the consensus – tied up as it is with continued euro membership and the European project as a whole – remains strong.

If European governments of the traditional left and right don’t find a way to keep public confidence in both themselves and the European project alive, then we will see outsiders keep rising and rising until one day they rise all the way into power. Even more worrying is what happens when despair at the political centre becomes despair over the political system as a whole, and starts to find expression in movements like Greece's Golden Dawn or in senseless acts of violence like the shooting of two police officers in Rome. They too are warning signs on the road to an austere future.

Birgitta Jonsdottir, leader of Iceland's anti-establishment Pirate Party. (Photo: Getty.)
Photo: Getty Images
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Caroline Lucas: The Prime Minister's narrow focus risks our security

Military force may sometimes be necessary. But resorting to bombs and bullets comes at a high price to those caught up in conflicts abroad and, all too often, to the future security of people across the world.

The protection of national security is the first duty of any government. In the dangerous world in which we live -where threats range from terrorist attacks, to public health emergencies and extreme weather events – we all want to feel safe in the knowledge that the government is acting in our best interests.

David Cameron’s speech yesterday marked a change in tone in this government’s defence policies. The MOD is emerging from the imposition of austerity long before other departments as ministers plan to spend £178bn on buying and maintaining military hardware over the next decade.

There is no easy solution to the threats facing Britain, or the conflicts raging across the world, but the tone of Cameron’s announcement – and his commitment to hiking up spending on defence hardware- suggests that his government is focussing far more on the military solutions to these serious challenges, rather than preventing them occurring in the first place.

Perhaps Cameron could have started his review by examining how Britain’s arms trade plays a role in conflict across the world. British military industries annually produce over $45 billion (about £30 billion) worth of arms. We sell weapons and other restricted technologies to repressive regimes across the world, from Saudi Arabia and the UAE to Kazakhstan and China. Furthermore Britain has sent 200 personnel in Loan Service teams in seven countries: Brunei, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates – helping to train and educate the armed forces of those countries.  Any true review of our security should certainly have looked closely at the effects of our arms industry- and the assistance we’re giving to powers in some of the most unstable regions on earth.

At the heart of the defence review is a commitment to what Cameron calls Britain’s “ultimate insurance policy as a nation’ – the so-called “independent nuclear deterrent”. The fact remains that our nuclear arsenal is neither “independent” – it relies on technology and leased missiles from the USA, nor is it a deterrent. As a group of senior military officers, including General Lord Ramsbotham and the former head of the armed forces Field Marshal Lord Bramall wrote in a letter to the Times “Nuclear weapons have shown themselves to be completely useless as a deterrent to the threats and scale of violence we currently face or are likely to face, particularly international terrorism.”

The cold truth is that France’s nuclear weapons didn’t protect Parisians against Isis terrorists, and our own nuclear weapons cannot be claimed to make us safer than Germany, Spain or Italy. The unending commitment to these weapons, despite the spiralling costs involved and the flimsy evidence in their favour, seems to be closer linked to international grandstanding than it does our national security. Likewise the Government’s further investment in drones, should be looked at closely, with former defence chiefs in the USA having spoken against these deadly pilotless aircraft and describing their use as a “failed strategy” which has further radicalised populations in the Middle East. A serious review of our defence strategy should have looked at the possibility of alternatives to nuclear proliferation and closely investigated the effectiveness of drones.

Similarly the conclusions of the review seem lacking when it came to considering diplomacy as a solution to international conflict. The Foreign Office, a tiny department in terms of cost, is squeezed between Defence and the (thankfully protected) Department for International Development. The FCO has already seen its budget squeezed since 2010, and is set for more cuts in tomorrow’s spending review. Officials in the department are warning that further cuts could imperil the UK’s diplomatic capacity. It seems somewhat perverse that that Government is ramping up spending on our military – while cutting back on the department which aims to protect national security by stopping disputes descending into war. 

In the government’s SDSR document they categories overseas and domestic threats into three tiers. It’s striking that alongside “terrorism” and “international military conflict” in Tier One is the increasing risk of “major natural hazards”, with severe flooding given as an example. To counteract this threat the government has pledged to increase climate finance to developing countries by at least 50 per cent, rising to £5.8 billion over five years. The recognition of the need for that investment is positive but– like the continual stream of ministerial warm words on climate change – their bold statements are being undermined by their action at home.

This government has cut support for solar and wind, pushed ahead with fracking and pledged to spend vast sums on an outdated and outrageously expensive nuclear power station owned in part by the Chinese state. A real grasp of national security must mean taking the action needed on the looming threat of energy insecurity and climate change, as well as the menace of terrorism on our streets.

Military force may sometimes be necessary. But resorting to bombs and bullets comes at a high price to those caught up in conflicts abroad and, all too often, to the future security of people across the world. It’s crucial we do not allow the barbarous acts carried out on the streets of Paris, in the skies above Egypt, the beaches of Tunisia or the hotels of Mali to cloud our judgement about what makes us safer and more secure in the long term.  And we must ensure that any discussion of defence priorities is broadened to pay far more attention to the causes of war, conflict and insecurity. Security must always be our first priority, but using military action to achieve that safety must, ultimately, always be a last resort.  

Caroline Lucas is the MP for Brighton Pavilion.