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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No, Donald Trump isn't starting World War Three in North Korea

The US president is living up to his promise to be "unpredictable". But is he using war as a sales pitch? 

“I plan on not dying,” Ian McCulloch of Echo and the Bunnymen told Spin magazine in 2008. “But if I have to, I want to die in Liverpool.” And so it was that nine years later, when war in the Asia-Pacific region suddenly seemed plausible, perhaps even likely, the musician pulled out of a solo show in Tokyo that was scheduled for 14 April and, according to Japan Today, left the country without even informing the event’s organisers. “We apologise for this significant inconvenience,” they later tweeted to ticketholders, blaming “news of an armed conflict between the US and North Korea” for the abrupt cancellation.

McCulloch isn’t the only one spooked by the heightened tensions between the two countries. Japan, America’s most strategically valuable ally in east Asia, lies within striking distance of Pyongyang’s weapons – military hardware that North Korea’s deputy foreign minister, Han Song-Ryol, recently insisted would continue to be tested “on a weekly, monthly and yearly basis”. On 8 April, three days before the North’s Supreme People’s Assembly was scheduled to convene, the 333-metre-long US aircraft carrier Carl Vinson left its home port of San Diego, accompanied by missile destroyers and a cruiser. The American president declared that he was sending an “armada” to the troublesome peninsula. If this was intended as a deterrence, however, North Korea was not deterred, and it fired a test missile from an eastern port on 16 April. The experiment ended in failure: the weapon exploded almost immediately after launch. Yet the message was clear. Don’t mess.

So the Korean War, which began in June 1950 but was never formally concluded with a peace treaty, has seemingly reached a crisis of a magnitude not felt since the armistice of 1953. Kim In-ryong, North Korea’s deputy UN ambassador, has accused the US of creating “a dangerous situation in which a thermonuclear war may break out at any moment”. If that’s true, McCulloch did well to take the first plane out of the area.

Such an apocalyptic scenario, however, remains unlikely to play out. It would serve no one’s interests, least of all North Korea’s, since the country could be wiped out almost immediately. Donald Trump demonstrated as much when he deployed the “mother of all bombs” – the Moab, the largest conventional explosive that the US has ever used in combat – on Isis bunkers in Afghanistan on 13 April. Perhaps more concerning to other heads of state than the damage done by the weapon was the apparent irrationality of the strike: Isis’s presence in the country is limited in comparison to that of the Taliban, and such an attack was unlikely to lead to any long-term resolution of the various crises there.

The US president, in effect, was signalling that he could match foes such as Kim Jong-un in terms of unpredictability – something that he had already underscored on 6 April with his surprise strike on a Syrian government airbase. It was a showbiz gesture.

On the campaign trail in January last year, Trump was asked whether he would consider bombing Iran’s nuclear facilities. “I’m gonna do what’s right,” he said. “I want to be unpredictable.” Since his inauguration, he has stuck to the latter part of that plan, from his on-again-off-again flirtation with Putin to his recent reversal on Chinese currency manipulation. Trump, it seems, is a president who wants to keep both enemies and allies on their toes. It’s a deal-making mentality – the sensibility of a salesman, not of a statesman. And it’s a dangerous one when applied to the global stage, where trust between nations is essential for any meaningful diplomacy.

If Trump is applying his “art of the deal” to America’s recent international ventures, it’s worth asking what the deal – or deals – in question might be. North Korea has long been a proxy for other problems in east Asia. The winding down of its nuclear weapons programme for its own sake looks, to me, unlikely to be the president’s principal objective (the US had a chance to pursue this in 1994 when it signed the Agreed Framework with North Korea, but political enthusiasm for it cooled almost before the ink had dried). But for a Third World War, even a thermonuclear one, to be put on the table as a potential reality, surely the stakes must be high?

I have my doubts. Trump’s foreign policy seems nowhere near as coherent or developed as, say, that of Barack Obama (imperfect though his doctrine of “patience” turned out to be). America’s recent actions have seemed opportunistic, rather than strategic. Brinkmanship from either side won't achieve anything, as both are reluctant to make concessions. So what could the US be up to?

Maybe the supposedly impending nuclear apocalypse is, at least in part, a ruse to sell stuff. Among the policy areas closest to Trump’s heart during his presidential campaign was trade. Last month, Peter Navarro, the director of the White House’s national trade council, told the Wall Street Journal: “Any country we have a significant trade deficit with needs to work with us on a product-by-product and sector-by-sector level to reduce that deficit over a specified period of time… That can be achieved, if they buy more of our products than they now are buying from the rest of the world, whether it’s chemicals or corn or whether, from a national security perspective, it’s submarines or aircraft.”

The countries with the largest trade imbalances with the US are China, Japan and Germany. China denies that it is deliberately pursuing a surplus in its dealings with US (and, frankly, what could America do about it anyway?), while Germany’s trade relations are handled by the European Union and so are difficult for the US to reset on a nation-to-nation basis. But Japan – which the US vice-president, Mike Pence, visited on a trade tour this week – has a pliable leader in Prime Minister Shinzo Abe.

Abe, a nationalist by instinct who has long struggled to remilitarise Japan and has incrementally reinterpreted his country’s pacifist constitution to permit increased military engagement, signed a significant arms trade pact with the US last year. Resistance to his agenda has been vocal in Japan at every step. However, fears of a rising threat from North Korea would give him more wriggle room. A Japanese commission is considering the potential benefits of deploying the US Terminal High Altitude Area Defense (THAAD) system on its territory. This system will soon be in use in South Korea – much to the annoyance of China, which suspects that it would be capable of tracking and countering its nuclear programme.

Trump’s insistence that trade imbalances be remedied is unrealistic in many sectors, not least in the auto sector, since Japan already allows US cars into its market tariff-free and they still don’t sell. Upping trade and collaboration in arms, however, would help Abe appease Trump while getting closer to fulfilling his own goal of a militarily robust Japan. The threat of war could also allow him to establish a more active role for the nation’s “self-defence forces”. The US president, meanwhile, would have succeeded in getting one of America’s supposed “free-rider” allies to contribute something closer to what he deems its fair share, while strengthening his hand against the real adversary: Beijing.

While US arms dealers are doubtless readying their wares for sale, war with North Korea will probably be averted by pressure from China, without whose oil, airports, trade and access to financial markets the rogue nation could not function. (Some 80 per cent of North Korean exports and imports are with China.) From this perspective, the recent tensions between the US and North Korea represent an admittedly melodramatic episode of the US “pivot” to the east, more than the beginning of the end of the world.

It’s an unstable stability, but stable enough to allow for shallow political game-playing – and I suspect Trump is gaming it (as the revelation that the Carl Vinson flotilla was 3,500 miles away from North Korea and heading the wrong way at the time of Trump’s “armada” threat suggests). So McCulloch needn’t have denied Japanese fans a rendition of “Killing Moon”. The bombs aren’t likely to fall yet.

Yo Zushi is a contributing writer for the New Statesman. His latest album, It Never Entered My Mind, is out now on Eidola Records and is on Spotify here.

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