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.)
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Q&A: Would Brexit really move “the Jungle” to Dover?

The 2003 Le Touquet treaty was negotiated outside the EU.

What is David Cameron’s most recent claim about Britain leaving the EU?

The Prime Minister is claiming that Brexit could result in France ending the agreement by which British immigration officials carry out checks on those seeking to enter the UK in France.  

More specifically, Cameron thinks that a vote to leave the EU would give the French government an excuse to revoke the Le Touquet treaty of 2003, and that this would cause refugee camps akin to the Calais “Jungle” to spring up along the English south coast.

What’s the Le Touquet treaty?

In February 2003, Tony Blair went to the northern French resort of Le Touquet to try and persuade President Jacques Chirac to support British and American military action in Iraq. (He failed). 

Blair and Chirac hogged the headlines, but on the summit’s sidelines, Home Secretary David Blunkett and his French counterpart, an ambitious young politician named Nicolas Sarkozy, negotiated a treaty establishing juxtaposed controls at each country’s sea ports.

This agreement meant that British border police could set up and run immigration checkpoints at Calais – effectively moving the British border there from Dover. The treaty also enabled French border police to carry out checks in Dover.

British border police had already been operating at French Eurostar terminals since 2001, and manning the French entrance to the Eurotunnel since 1994.

What’s all this got to do with the EU?

Technically, nothing. The Le Touquet treaty is a bilateral agreement between the UK and France. Both countries happen to be member states of the EU, but the negotiations took place outside of the EU’s auspices.

That's why eurosceptics have reacted with such fury today. Arron Banks, the co-founder of Leave.EU, said the Prime Minister was “resorting to scaremongering”, while Ukip’s migration spokesperson, in a surprising role-reversal, said that Cameron’s argument was “based on fear, negativity, and a falsehood”.

Cameron’s claim appears to be that Brexit would represent such a profound shift in the UK’s relationship with other European states that it could offer France an excuse to end the agreement reached at Le Touquet. That is debatable, but any suggestion that the treaty would instantly become void in the event of a vote to leave is untrue.

Does France actually want to revoke the treaty?

Local politicians in Calais, and in particular the town’s mayor, have been arguing for months that the treaty should be abandoned. Le Monde has also criticised it. The current French Interior Minister, Bernard Cazeneuve, hinted today that he agreed, saying that a British vote to leave “will always result in countermeasures”.

On the BBC's Today programme this morning, Rob Whiteman, a former head of the UK Border Agency, said that it was “almost certain” that the treaty would end if the UK left the EU. He said that France has benefited less from the deal than it expected:

“I think at the time the French felt there would be an upside for them, in that if it was clear that people could not easily get to Britain it would stop Sangatte building up again. The camp was closed. But history has shown that not to be the case. The French authorities still have a huge amount of pressure on their side.”

That said, the French government receives money from the British to help police Calais and its camps, and various French officials have acknowledged that their ports would receive even more traffic if refugees and migrants believed that it was easier to travel  to the UK than before.

If the treaty ended, would “the Jungle” just move to Dover?

There’s little doubt that because of linguistic and familial ties, and perhaps the perception that the UK is more welcoming than France, many refugees and migrants would come to the UK as quickly as they could to claim asylum here.

Whiteman also said on Today that since the 2003 agreement, the annual number of asylum claims in the UK had declined from 80,000 to around 30,000. So the UK could expect a significant spike in claims if the treaty were to end.

But the British asylum process makes it unlikely that anything like “the Jungle” would spring up. Instead, those claiming asylum would be dispersed around the country or, if authorities are worried they would flee, held in an immigration detention centre.

Why is Cameron saying this now?

This looks suspiciously like one of the Tories' election strategist Lynton Crosby’s dead cats. That is, in an effort to distract his critics from the detail of the renegotiation, the PM has provoked a row about migrants and refugees. Cameron is clearly keen to move the debate on from the minutiae of different European agreements to bigger questions about security and terrorism. Though getting bogged down in competing interpretations of a treaty from 2003 may not be the best way to move onto that broader terrain.