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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The failed French presidential candidates who refuse to endorse Emmanuel Macron

While the candidates of the main left and right parties have endorsed the centrist from nowhere, others have held back. 

And breathe.

At 8pm on Sunday night France, Europe, and much of the West let out a huge sigh of relief. After over a month of uncertainty, scandals, rebounds, debates and late surges, the results of the first round of the French Presidential Election was as predicted: Emmanuel Macron (24 per cent) will face off against Marine Le Pen (21 per cent) in the second round of the election on the 7 May.

While polls have been predicting this face-off for a while, the shocks of Brexit and the election of Donald Trump had thrown polling predictions into doubt. But France has a good track record when it comes to polling, and their surveys are considered some of the most reliable in the world. The irony is that this uncertainty has meant that the polls have never been so central to a campaign, and the role of polling in democracies has been a hot topic of debate during the election.

The biggest surprise in many ways was that there were no surprises. If there was a surprise, it was a good one: participation was higher than expected: close to 80 per cent – on par with the Presidential Elections of 2012 – whereas there were concerns it would be as low as 70 per cent. Higher participation is normally a bad sign for the extremes, who have highly motivated voters but a limited base, and who often do better in elections when participation is low. Instead, it boosts the traditional parties, but here instead of the traditional right-wing Republican (Fillon is at 20 per cent) or Socialist parties (Hamon at 6 per cent), it was in fact the centre, with Emmanuel Macron, who benefited.

So France has so far not succumbed to the populist wave that has been engulfing the West. The contagion seemed to be spreading when the Italian Prime Minister Matteo Renzi lost a referendum on reforming the constitution, but the fightback started in Austria which rejected the far-right candidate Norbert Hofer in its Presidential election and voted for the pro-European, former-Green independent candidate Alexander Van der Bellen. Those hopes now rest on the shoulders of Macron. After having dubbed Angela Merkel the leader of the free world during his farewell tour of Europe, Barack Obama gave his personal blessing to Macron last week.

Many wondered what impact Thursday night’s shooting on the Champs-Elysées would have. Would it be a boon for Marine Le Pen’s anti-immigration platform? Or even right-wing François Fillon’s more traditional law and order approach? In the end the effect seems to have been minimal.

In the second round, Macron is currently predicted to beat Marine Le Pen by more than 60 per cent of the vote. But how does Le Pen almost double her vote in the second round, from around 20 per cent to close to 40 per cent? The "Republican Front" that saw her father off back in 2002, when he received only 18 per cent of the vote, has so far held at the level of the two traditional political parties. Both Hamon and Fillon have called to vote for Macron in the second round to stop the Front National - Hamon put it nicely when he said he could tell the difference between political opponents, and opponents of the Republic.

But not everyone is toing the line. Sens Commun, the anti-gay marriage group that has supported Fillon through thick and thin, said that it will not call to vote for either party – a thinly veiled invitation to vote for Le Pen. And Nicolas Dupont-Aignan, a conservative, Catholic and anti-EU right wing candidate, whose 5 per cent is the reason Fillon didn’t make it to the second round, has also abstained from calling to vote for either. It is within this electorate that Le Pen will look to increase her vote.

The other candidate who didn’t call to vote for anyone was Jean-Luc Mélenchon, who fell back on a demagogic position of saying he would follow the wishes of his supporters after having consulted them. But as a spokesperson for the FN pointed out, there are remarkable congruities between their respective platforms, which can be categorised as a populism of the left and a populism of the right.

They in particular converge over the question of Europe. Aping Brexit, both want to go to Brussels to argue for reform, and if none is forthcoming put membership of the Eurozone to the electorate. While Le Pen’s anti-Europeanism is patent, Mélenchon’s position is both disingenuous and dangerous. His Plan A, as he puts it, is to attempt reform at the European level. But he knows fine well that his demands, which include revoking the independence of the European Central Bank and putting an end to austerity (the ECB, through its massive programme of quantitative easing, has already been trying to stimulate growth) will not be met. So he reverts to his Plan B, which is to leave the European Treatises and refound Europe on a new basis with like-minded members.

Who those members might be he hasn’t specified, nor has he explained how he would leave the EU - at least Le Pen had the decency to say she would put it to a referendum. Leaving the European Treatise has been in his programme from the beginning, and seems to be the real object of his desires. Nonetheless, having set himself up as the anti-Le Pen candidate, most of his supporters will vote for Macron. Others will abstain, and abstention will only help Le Pen. We’ve been here before, and the last thing we need now is complacency.

 

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