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.)
Getty
Show Hide image

The problem with grammar schools – and the answer to Labour's troubles

This week's news, from Erdogan the despot, to memories of Disraeli, and coffee and class.

Whom should we be cheering in Turkey? Coups are by their nature ­anti-democratic, whatever the rhetoric of their instigators, but Recep Tayyip Erdogan, the Islamist president, is about as much of a democrat as Vladimir Putin. Once he regained power, he dismissed several thousand judges, putting some under arrest. A large number of journalists were already in prison.

As recently as 1990, nearly half of Turkey’s employed population worked on the land and, even now, the proportion is more than a quarter. Erdogan has ruthlessly exploited the pious, socially conservative instincts of his people, who are rarely more than a generation away from the peasantry (and therefore politically “backward” in the Marxian sense), to win elections and push through economic liberalisation and privatisation. His foreign affairs ministry claims that the aim is to confine the state’s role to health, basic education, social security and defence. That is good enough for most Western governments. Provided he also co-operates in limiting the flow of Middle Eastern migrants into Europe, Erdogan can be as Islamist and authoritarian as he likes.

 

Quick fix for Labour

I have an answer to Labour’s problems. Its MPs should elect their own leader while Jeremy Corbyn continues as party leader. The former, recognised by the Speaker as the leader of the parliamentary opposition, would get the usual state aid for opposition parties. Corbyn would control Labour Party funds and assets.

He and his hardcore supporters should welcome this arrangement. Their aim, they say, is to build a new social movement. Relinquishing the burden of parliamentary leadership would leave them free to get on with this project, whatever it means. Corbyn could go back to what he enjoys most: voting against the Labour front bench. He would no longer have to dress up, bow to the Queen or sing the national anthem. This, I grant you, would not be a satisfactory solution for the long term. But the long term is more or less extinct in British politics. If Labour had peace for a few months, it might be enough. The situation would be resolved either by Corbyn falling under a bus (preferably not one driven by a Labour MP) or the Tory government collapsing in the face of a mass people’s uprising demanding Corbyn’s installation as supreme ruler. Don’t tell me that neither is likely to happen.

 

Divide and rule

The choice of Birmingham as the location to launch Theresa May’s leadership campaign, combined with proposals such as worker representation on company boards, has drawn comparisons between the new Prime Minister and Joseph Chamberlain.

Chamberlain, who as mayor of Birmingham in the mid-1870s tore down slums, brought gas and water supplies under public control and opened libraries, swimming pools and schools, was a screw manufacturer. There was an Edwardian joke – or, if there wasn’t, there ought to have been – that he screwed both major parties. He became a Liberal cabinet minister who split the party over Irish home rule, putting it out of power for most of the next 20 years. He and his followers then allied themselves with the Tories, known at the time as the Unionists. He duly split the Unionists over tariff reform, excluding them from office for a decade after the Liberals won the 1906 election.

Chamberlain was a populist who brilliantly combined patriotic imperialism with domestic radicalism, proposing smallholdings of “three acres and a cow” for every worker. One can see the appeal to some Brexiteers but he was also divisive and volatile, making him an odd role model for a supposedly unifying leader.

 

Mind your grammar

Justine Greening, the new Education Secretary, is the first to be wholly educated at a mainstream state secondary comprehensive. Pro-comprehensive groups were almost lyrical in praise of her appointment. Yet, unlike her predecessor-but-one, Michael Gove, she declines to rule out the ­return of grammar schools.

To understand how iniquitous grammar schools were, you need to have attended one, as I did. Primary-school friendships were ruptured, usually along lines of social class. The grammars were rigidly stratified. I was in the A stream and do not recall any classmates from semi-skilled or unskilled working-class homes. They were in the C stream and left school as early as possible with a few O-levels. No minister who wants a “one-nation Britain” should contemplate bringing back grammar schools.

 

Living history

Simon Heffer’s recent account in the NS of how his father fought in the Battle of the Somme led one letter writer to ask if anyone alive today could have a grandparent born in the 18th century. Another NS reader replied with an example: John Tyler, a US president of the 1840s, born in Virginia in 1790, had two grandsons who are still alive. Here is another possibility. “As Disraeli said to my husband . . .” If you hear a 94-year-old say that, don’t dismiss her as demented. Disraeli died in 1881. A 71-year-old who married a 24-year-old in 1946 (not impossible; the actors Cary Grant and Anthony Quinn both married women 47 years younger) could have spoken to Disraeli as a boy.

The past is not as far away as we think, though many politicians and journalists behave as though anything before 1980 happened on another planet.

 

Milk money

The class system is alive and well in parts of England. On a family weekend walk, we came across a small village with two adjacent pubs – one clearly for the toffs, the other more plebeian. This was most evident when ordering coffee. The downmarket pub told us that it served only UHT milk with its hot drinks. The other was ostentatiously horrified at the suggestion that it might serve any such thing. 

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt