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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Locals without borders: governments are using diasporas to shape the migration crisis

Governments of countries key to the migration crisis are tapping diaspora influence more than ever before.

Last month, on 21 June, thousands of Eritreans descended on Geneva and marched across the city, finally stopping at the Place des Nations in front of the UN. The demonstrators had come from across Europe: Italy, Germany, London, and a young man who looked blankly at my French and English questions before exclaiming “Svenska!” (“Swedish!”).

They were here to denounce a recent report by the UN Human Rights Council condemning widespread violations of basic rights in Eritrea. According to the protesters, the report was based on shoddy research and is biased and politically-motivated: “Stop regime change agendas!” said one banner.

Two days later, a similarly sized group of Eritreans marched in the same direction, for the opposite reason. This contingent, 10,000-strong according to the organisers, wanted to show their backing for the report, which highlights many of the problems that led them to leave the Horn of Africa in the first place. Forced conscription, extrajudicial killings, and official impunity, all pinpointed by the UN inquiry, have driven a mass exodus to the surrounding region and beyond. In 2015 alone, 47,025 Eritreans crossed the Mediterranean to request asylum in Europe.

Two things stood out. First was the sharp polarisation of the Eritrean diaspora community in Europe, which muddies the waters for outsiders trying to make sense of the situation: how can one side say everything is fine while the other claims massive abuses of rights?

Second was the sheer engagement of this diaspora, some of whom may never have set foot in Eritrea. They had come from across Europe, with or without the help of funding, to stand on a rainy square and fight for the narrative of their nation.

As an Irishman abroad, would I have the commitment to jump on a plane for a political protest with no certain outcome? I probably wouldn’t, but then again my country is not just 25 years old and still struggling to define itself on the international stage.

Individual stakes are also much higher for people like Abraham, an Eritrean in Switzerland who told me how he was forced into the army for seven years before managing to escape via Sudan two years ago. With two children still in Asmara, he has significant skin in the game.

As for the naysayers, they are also under certain pressure. Some reports suggest that the government in Asmara exercises extensive power in certain diaspora circles, threatening to cancel the citizenship of those who denounce the regime or refuse to pay 2 per cent income tax each year.

Ultimately, such a situation can only lead to a committed kind of polarisation where pro-government supporters need to publicly demonstrate their backing, and the anti-government kind have nothing left to lose.

But on a more benign level, the idea of states systematically harnessing the power of the diaspora for domestic gains has also been growing elsewhere – including in Ireland. Historically a nation of emigrants, Ireland has seen its diaspora swell even further following the economic downturn: OECD figures estimate that one in six Irish-born people now live abroad.

In an age of networks and soft power, this represents a sizeable demographic, and a well-educated and well-off one to boot. The government has clearly recognized this. In 2009, the first Global Irish Economic Forum was held to tap into the business know-how of expats, and has since taken place biannually.

More importantly, two years ago the first Minister for the Diaspora was appointed, tasked with taking overall charge of engagement efforts: no longer simply cultural ambassadors operating Irish bars abroad, emigrants are economic and political seeds to be cultivated. A referendum is planned next year on whether to grant them the right to vote from abroad in presidential elections.

Elsewhere, in Germany, the 3m-strong Turkish population has attracted renewed interest from the government of Recep Tayyip Erdogan in recent years. According to a 2014 paper by think tank SWP, Ankara now explicitly designates these Turks abroad as a “diaspora” rather than a scattered group, and adopts clear public diplomacy efforts, channelled through cultural centres, to tap their influence.

This has sometimes rankled in Berlin: although Ankara’s diaspora policy encourages citizens to learn German and integrate into German society, the underlying motivation is one of Turkish self-interest rather than benign assimilation. In a battle for the front-foot, German immigration policy clashes with Turkish emigration policy.

Intra-EU movements, largely unhampered by visa questions, have also become substantial enough to warrant attention. For example, hit hard by the economic downturn and austerity measures, many educated Spaniards and Portuguese have flocked to Northern European cities to seek employment.

London, a melting pot of diasporas from all over the world, is reportedly home to more French people than Bordeaux: together they would make up the sixth largest city in France. As countries continue to rebuild following the financial crisis, forging a connection to the skills and political power of such emigrants is a policy imperative.

And if no other EU country, aside from Ireland, has introduced a dedicated minister for this, the growing economic potentials may spur them to do so.

Diasporas have been around for millennia. Why are governments getting so interested now? And what does it mean for the future of citizenship, nationality, and identity?

Technology is one obvious game-changer. Diasporas not only have more options to keep in touch with their home country, but with so much of daily life now happening on virtual platforms, they also have less reason to integrate in their host society.

It is now almost feasible to ignore the surrounding communities and live quite comfortably in a bubble of media and connections from back home. This then works both ways, with governments increasingly willing to use such communications to maintain links. The “imagined spaces” of nations are morphing into “virtual spaces”, with unpredictable consequences for traditional models of integration.

Marco Funk, a researcher at the EU Institute for Security Studies in Brussels, says that the growing ease of mobility compounds the idea of “people moving from one country to another and staying there” as simply out-of-date.

The coming years, he says, will be marked by patterns of “circular migration”, where citizens hop from one country to another as whim and economic opportunity arise. Governments, especially in an increasingly stagnant Europe, will likely try to beef up links with this mobile generation, especially since it is often pulled from the more educated classes.

Fearing a “brain drain”, yet unable to keep the talent at home, they may foster a more fluid system of “brain exchange”: the diaspora as a mobile resource rather than physical loss.

Of course, none of this will be straightforward, especially at a time when a major fault-line around the world is the future of globalisation and migration. An uptick in nationalist tendencies may mean that diasporas will find themselves (once again) unwilling pawns on a political chessboard, protected or manipulated by governments back home while scapegoated by segments of their host societies.

But one thing is sure: even as walls are rebuilt, diasporas will not disappear, and governments are recognising their power. All politics may remain local, but the local now knows no bounds.