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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Munich shootings: The bloody drama where everyone knows their part

A teenage gunman murdered nine people in Munich on Friday night. 

At time of writing, we know only certain facts about the gunman who shot and killed nine people and wounded many more at a shopping centre in Munich.

He was 18 years old. He was German-Iranian. He was reported to have shouted: "I am German." After murdering his innocent victims he killed himself.

We don't know his motive. We may never truly understand his motive. And yet, over the last few years, we have all come to know the way this story goes.

There is a crowd, usually at ease - concertgoers, revellers or, in this case, shoppers. Then the man - it's usually a man - arrives with a gun or whatever other tool of murder he can get his hands on. 

As he unleashes terror on the crowd, he shouts something. This is the crucial part. He may be a loner, an outsider or a crook, but a few sentences is all it takes to elevate him into the top ranks of the Islamic State or the neo-Nazi elite.

Even before the bystanders have reported this, world leaders are already reacting. In the case of Munich, the French president Francois Hollande called Friday night's tragedy a "disgusting terrorist attack" aimed at stirring up fear. 

Boris Johnson, the UK's new foreign secretary, went further. At 9.30pm, while the attack was ongoing, he said

"If, as seems very likely, this is another terrorist incident, then I think it proves once again that we have a global phenomenon now and a global sickness that we have to tackle both at source - in the areas where the cancer is being incubated in the Middle East - and also of course around the world."

On Saturday morning, reports of multiple gunmen had boiled down to one, now dead, teenager. the chief of Munich police stated the teenage gunman's motive was "fully unknown". Iran, his second country of citizenship, condemned "the killing of innocent and defenceless people". 

And Europe's onlookers are left with sympathy for the victims, and a question. How much meaning should we ascribe to such an attack? Is it evidence of what we fear - that Western Europe is under sustained attack from terrorists? Or is this simply the work of a murderous, attention-seeking teenager?

In Munich, mourners lay flowers. Flags fly at half mast. The facts will come out, eventually. But by that time, the world may have drawn its own conclusions.