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Chile

Can Bachelet win a first-round victory in Chile’s presidential election?

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Michelle Bachelet is almost certain to set a new precedent in post-Pinochet Chilean politics when she wins a second (non-consecutive) term as president, returning to the office she held between 2006 and 2010. chile

But it’s an open question as to whether Bachelet (pictured above) will do so with a first-round victory — meaning that Bachelet will need to win at least 50% of the vote on Sunday, November 17 in order to avoid a runoff later in December.

Bachelet’s victory would return the broad center-left Concertación de Partidos por la Democracia (Concert of Parties for Democracy) to La Moneda, Chile’s presidential palace after the center-right presidency of businessman Sebastián Piñera, the first non-Concertación president in Chile’s post-Pinochet era, which began with the October 1988 referendum in which Chilean voters opposed extending the reign of Augusto Pinochet’s  on

Some polls show Bachelet tantalizingly close to achieving enough support for a first-round victory.  An Opina Research poll published by El Comercio earlier this week shows Bachelet with 46%, to just 22% for Evelyn Matthei, the candidate of Chile’s center-right coalition, the Coalición por el Cambio (Coalition for Change), but widely known as the Alianza por Chile (Alliance for Chile).  A Centro de Estudios Públicos poll from last week shows Bachelet with 47% and Matthei with just 14%.

But an even more recent IPSOS survey conducted between October 19 and November 5 shows that Bachelet is very likely to head to a runoff — even after stripping out undecided voters, Bachelet won just 35% and Matthei won 22%.

Bachelet’s problem is that Matthei doesn’t represent her sole competition.  Two third-party candidates routinely poll between 10% and 15% in surveys, and they could shake up Sunday’s race if Bachelet’s supporters remain complacent and center-right voters remain unenthusiastic about Matthei.

The first is Marco Enríquez-Ominami (popularly known as ‘MEO’), who burst onto the Chilean political scene in 2009 when he left the Partido Socialista de Chile (PS, Socialist Party of Chile) to run for president as an independent.  MEO ultimately won 20% of the vote, falling behind both Piñera and the runner-up, former president Eduardo Frei Ruiz-Tagle.  Enríquez-Ominami founded the Partido Progresista (Progressive Party) in 2010, and he’s running again for president on a stridently leftist platform that openly embraces the communist legacy of former Chilean president Salvador Allende, who died in the 1973 coup that brought Augusto Pinochet to power.  The events of both the Allende presidency and the Pinochet regime continue to loom heavily over Chilean politics.

But another independent candidate has stolen some thunder from both MEO and Matthei.  Franco Parisi, a popular economist and business professor, and a a former councillor of Chile’s copper commission between 2010 and 2012, is running as a centrist candidate in the presidential elections.  Matthei has launched a negative onslaught against Parisi over the past few weeks, accusing him of owing $200,000 in back wages to employees, and though her negative attacks have reversed some of Parisi’s gains, he’s still polling in the mid-teens.

A third candidate, Marcel Claude, a former official in Chile’s central bank and an environmental activist, is running as an independent with the endorsement of Chile’s small Humanist Party.

In the most recent IPSOS poll, 15% of voters supported Parisi, 12% supported Enríquez-Ominami, 7% supported Claude and 5% supported other small candidates — taken together, that means that 39% of Chileans support a third candidate in 2013, even more than support Bachelet.  Moreover, depressed turnout for Mathei’s candidacy could conceivably launch either Parisi or Enríquez-Ominami into a runoff with Bachelet — it would be the first such presidential runoff that didn’t feature a race between the mainstream center-left Concertación and the mainstream center-right Alianza.  Continue reading Can Bachelet win a first-round victory in Chile’s presidential election? →

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Does the Chilean right have any chance in November against Bachelet?

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Earlier this year, before anyone had jumped into the Chilean presidential race, you could easily have thought that the inevitable candidacy of popular former center-left president Michelle Bachelet was a kind of dress rehearsal for Hillary Clinton’s potential 2016 U.S. presidential race.chile

After four years away from La Moneda, Chile’s presidential palace, and fresh off a stint with the United Nations as the head of the newly created UN Women group, Bachelet was not only the overwhelming favorite to win the presidential nomination of the Concertación de Partidos por la Democracia (Concert of Parties for Democracy), the coalition of Chile’s center-left parties, but to win the November 17 election outright, perhaps with enough support to win an absolute majority and avoid a presidential runoff for the first time in two decades. 

True to form, Bachelet returned to great fanfare in March, declared her candidacy for president and won the Concertación primary with over 75% of the vote, putting her on track to accomplish what no other former president has done in the post-Pinochet era — return for a second term at La Moneda.  While Chilean presidents are prohibited from running for reelection, they are not prohibited from running for a second, non-consecutive term.

But the path has only smoothed for Bachelet as the Chilean right has lurched from one crisis to the next, settling on its third-choice candidate for president, Evelyn Matthei (pictured above) late last month.

Her hasty selection ensures that the next president of Chile will almost certainly be a woman, but it also establishes a new dynamic in the race.

Matthei and Bachelet were once childhood playmates when their fathers served together in Chile’s air force.  Matthei’s father, however, supported Augusto Pinochet after the 1973 coup against Salvador Allende.  Bachelet’s father, a general who opposed the coup led by then-general Pinochet, was later imprisoned and tortured by the Pinochet regime until he died in 1974 imprisoned.  Bachelet and her mother emigrated to Australia and East Germany, though Bachelet returned to Chile in 1979 to pursue a career as a pediatrician.

Matthei is not incredibly conservative on social issues like abortion and same-sex marriage, and she has a reputation as an outspoken, independent, and sometimes profane voice in Chilean politics.  Given that she’s more personable than the candidate she replaces, Pablo Longueira, a former senator and minister of economy in Piñera’s administration, she could well turn out to be a better standard-bearer for what was always going to be an uphill fight.  It also helps that she’s not burdened with having directly supported Pinochet in the 1980s, tedious baggage that Longueira would have carried with him into the election.  Pinochet’s toxic legacy is one reason that Piñera has been only the first right-wing president Chilean president since the Pinochet left office in 1990.  Piñera himself has become increasingly unpopular in office, though he’s bounced back from a 2012 nadir — the latest July Adimark survey gives him a 37% approval rating (with 53% disapproval).

Longueira abruptly withdrew from the race in late July after disclosing that he was suffering from severe depression.   Continue reading Does the Chilean right have any chance in November against Bachelet? →

European Union, Iceland

Iceland ends its short-lived quest to join the European Union

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It should have come as no surprise to observers of Iceland, but its new center-right government has firmly closed the door to membership in the European Union anytime soon, with an announcement from Icelandic foreign minister Gunnar Bragi Sveinsson (pictured above, left) last week.Iceland Flag IconEuropean_Union

It was virtually certain that Iceland would take a step back from EU membership, given that both governing parties — the Framsóknarflokkurinn (Progressive Party) and the Sjálfstæðisflokkurinn (Independence Party) — campaigned against EU membership in Iceland’s April parliamentary elections.

Former social democratic prime minister Jóhanna Sigurðardóttir launched membership talks with the European Union in July 2009, when Iceland was still reeling from the effects of a financial crisis that bankrupted its three major banks and left Iceland in economic meltdown.  In the immediate aftermath of the September 2008 crisis, some Icelanders even seriously considered joining the euro after the Icelandic krónur tanked in value.  As Iceland’s economy has recovered to some degree, despite difficult loan burdens and continued currency controls, and as the eurozone has come to appear more like a monetary straitjacket than an economic life raft, Icelandic voters have increasingly soured on the benefits of EU membership.

Though prime minister Sigmundur Davíð Gunnlaugsson’s Progressive Party was seen as originally more open to continuing the talks, Gunnlaugsson seems to have taken aboard the more hardline views of the Independence Party — no one quite expected the government to end negotiations with such resolute finality in only its first month in office.

So while Iceland will continue to be a part of Europe, it will do so, like Norway and Switzerland, outside of a formal membership of the European Union.

As I wrote in the immediate aftermath of the election, however, the line between membership and Iceland’s current status is not as bright as you might expect: Continue reading Iceland ends its short-lived quest to join the European Union →

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Gunnlaugsson now unexpectedly in line to form Icelandic government

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Despite the fact that Iceland’s long-ruling Sjálfstæðisflokkurinn (Independence Party) won about 2% more in voter support in Saturday’s parliamentary elections, it looks like Sigmundur Davíð Gunnlaugsson, the leader of the second-place Framsóknarflokkurinn (Progressive Party), will have the first shot at forming a government.Iceland Flag Icon

That’s because both parties ultimately won 19 seats each in the Alþingi, Iceland’s parliament, and Iceland’s president, Ólafur Ragnar Grímsson, surprisingly decided to give Gunnlaugsson the first shot at forming the next Icelandic government.

The decision shines a spotlight on the fact that in many countries, the head of state has quite an influential role in determining who will be the next head of government — in this case, it seems like Gunnlaugsson will nonetheless be on track to become the next prime minister, not the leader of the Independence Party, Bjarni Benediktsson.

It makes some intuitive sense — the Progressives have by far the most momentum, having garnered nearly an additional 10% of the vote in the 2013 election, and although the Independence Party won the vote in Reykjavík and the small southwestern region of Iceland surrounding Reykjavík, the Progressives won more votes in all of the other regions of the country (though they are more sparsely populated).

Although all signals from both Gunnlaugsson and Benediktsson are that they’ll form a center-right coalition, one possibility that I hadn’t considered is that Gunnlaugsson might join forces with other parties, leaving the Independence Party outside of government.

That seems unlikely, of course, but it’s an avenue that’s more open to the Progressives than the Independence Party, given that the Progressives can make a marginally better argument that they represent a rupture from both the Independence Party that dominated Icelandic government in the decades prior to 2009 and the more recent government led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance) and their coalition partners, the Vinstrihreyfingin – grænt framboð (Left-Green Movement).

Mathematically, a government needs 32 seats for a majority in the 63-member Alþingi.

Conceivably, and this is now in the realm of pure speculation, that means that Gunnlaugsson could team up with the Social Democratic Alliance and the Left-Green Movement for a 35-seat majority, though that seems nearly suicidal, given that the two parties suffered the heaviest losses in the recent election.  It seems even more unlikely given the Social Democratic Alliance’s support for joining the European Union, a position that both the Independence Party and the Progressives — and even the Left-Green Movement — oppose.

But another path might include a Progressive-led government that draws on support from the anti-EU membership Left-Green Movement and the most successful of the two newest parties in the Alþingi, Björt framtíð (Bright Future) — that would bring exactly 32 seats.  Bright Future was founded both by former Social Democrats and Progressives, which means that, despite its pro-EU membership views, Bright Future could be an easier coalition partner for the Progressives.

What’s clear is that, for now, Gunnlaugsson would appear to have the greatest number of options, including several novel paths to a government that could shake up Icelandic politics more than we thought even over the weekend.

Bulgaria, Cyprus, European Union, France, Germany, Greece, Italy, Spain, United Kingdom

What Iceland’s election tells us about post-crisis European politics

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Iceland was supposed to be different.Iceland Flag IconEuropean_Union

In allowing its banks to fail, neo-Keynesian economists have argued, Iceland avoided the fate of Ireland, which nationalized its banks and now faces a future with a very large public debt.  By devaluing its currency, the krónur, Iceland avoided the fate of countries like Estonia and others in southern Europe trapped in the eurozone and a one-size-fits all monetary policy, allowing for a rapid return to economic growth and rapidly falling unemployment.  Neoclassical economists counter that Iceland’s currency controls mean that it’s still essentially shut out from foreign investment, and the accompanying inflation has eroded many of the gains of Iceland’s return to GDP growth and, besides, Iceland’s households are still struggling under mortgage and other debt instruments that are linked to inflation or denominated in foreign currencies.

But Iceland’s weekend parliamentary election shows that both schools of economic thought are right.

Elections are rarely won on the slogan, ‘it could have been worse.’ Just ask U.S. president Barack Obama, whose efforts to implement $800 billion in stimulus programs in his first term in office went barely mentioned in his 2012 reelection campaign.

Iceland, as it turns out, is hardly so different at all — and it’s now virtually a case study in an electoral pattern that’s become increasingly pronounced in Europe that began when the 2008 global financial crisis took hold, through the 2010 sovereign debt crisis in the eurozone and through the current European-wide recession that’s seen unemployment rise to the sharpest levels in decades.

Call it the European three-step.

In the first step, a center-right government, like the one led by Sjálfstæðisflokkurinn (Independence Party) in Iceland in 2008, took the blame for the initial crisis.

In the second step, a center-left government, like the one led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance) in Iceland, replaced it, only to find that it would be forced to implement harsh austerity measures, including budget cuts, tax increases and, in Iceland’s case, even more extreme measures, such as currency controls and inflation-inducing devaluations.  That leads to further voter disenchantment, now with the center-left.

The third step is the return of the initial center-right party (or parties) to power, as the Independence Party and their traditional allies, the Framsóknarflokkurinn (Progressive Party) will do following Iceland’s latest election, at the expense of the more newly discredited center-left.  In addition, with both the mainstream center-left and center-right now associated with economic pain, there’s increasing support for new parties, some of them merely protest vehicles and others sometimes more radical, on both the left and the right.  In Iceland, that means that two new parties, Björt framtíð (Bright Future) and the Píratar (Pirate Party of Iceland) will now hold one-seventh of the seats in Iceland’s Alþingi.

This is essentially what happened last year in Greece, too.  Greece Flag IconIn the first step, Kostas Karamanlis and the center-right New Democracy (Νέα Δημοκρατία) initially took the blame for the initial financial crisis.  In the second step, George Papandreou and the center-left PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) overwhelming won the October 2009 elections, only to find itself forced to accept a bailout deal with the European Commission, the European Central Bank and the International Monetary Fund.  In the third step, after two grueling rounds of election, Antonis Samaras and New Democracy returned to power in June 2012.

By that time, however, PASOK was so compromised that it was essentially forced into a minor subsidiary role supporting Samaras’s center-right, pro-bailout government.  A more radical leftist force, SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), led by the young, charismatic Alexis Tsipras, now vies for the lead routinely in polls, and on the far right, the noxious neo-nazi Golden Dawn (Χρυσή Αυγή) now attracts a small, but significant enough portion of the Greek electorate to put it in third place.

The process seems well under way in other countries, too.  In France, for examFrance Flag Iconple, center-right president Nicolas Sarkozy lost reelection in May 2012 amid great hopes for the incoming Parti socialiste (PS, Socialist Party) administration of François Hollande, but his popularity is sinking to ever lower levels as France trudges through its own austerity, and polls show Sarkozy would now lead Hollande if another presidential election were held today.

It’s not just right-left-right, though. The European three-step comes in a different flavor, too: left-right-left, and you can spot the trend in country after country across Europe — richer and poorer, western and eastern, northern and southern. Continue reading What Iceland’s election tells us about post-crisis European politics →

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Final Icelandic election results

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althingiJust a quick post to note the final results of Saturday’s Icelandic parliamentary elections.Iceland Flag Icon

As expected, the center-right will return to power, with the top two parties, the Framsóknarflokkurinn (Progressive Party) and the Sjálfstæðisflokkurinn (Independence Party) widely expected to form a governing coalition, thereby returning to power in as wide a swing in Saturday’s election as the swing against them in the April 2009 elections.

Although both parties will hold 19 seats each in the 63-member Alþingi, Iceland’s parliament, the Independence Party’s leader Bjarni Benediktsson will likely become prime minister instead of the Progressive Party’s Sigmundur Davíð Gunnlaugsson, though that’s far from clear, even today, with both leaders discussing options to form a government with Iceland’s president.

Until last week, Gunnlaugsson seemed very likely to become prime minister, riding a wave of popularity over his party’s stance in opposition to reimbursing the British, Dutch and other governments that, in turn, reimbursed non-Icelandic citizens who lost their savings when IceSave collapsed along with Iceland’s entire banking system.  Only a couple of weeks ago, Benediktsson was facing a coup attempt within the Independence Party over his own leadership.  As the campaign closed, however, the Independence Party made up much of its lost ground, though they have finished just 3% higher than their historical low of 23.7% in the 2009 election and the Progressives jumped 9.6% from the previous election:

iceland

The Independence Party, in particular, has long dominated Icelandic politics since independence from Denmark in 1944, and it was in charge of running the country in the decades leading up to the 2008 banking crisis — its leaders at the time, prime minister Geir Haarde and former prime minister and Icelandic central bank president Davíð Oddsson were widely blamed at the time for the collapse and for establishing the conditions that led to the collapse.

The government which followed, led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance), in alliance with the Vinstrihreyfingin – grænt framboð (Left-Green Movement), represented the first government since the 1950s not dominated by the Independence Party.  While it leaves office with, I think, a fairly strong record of having strengthened women’s right, returned Iceland’s economy to GDP growth and massively lowered unemployment to under 5%, Icelandic voters remain relatively strained, even five years after the crisis.  GDP growth has returned thanks only to capital controls and the massive devaluation of the krónur, inflation has erased much of those gains for typical Icelandic households, many of which struggle under debt loads denominated in foreign currencies.

Sigurðardóttir’s government also probably suffered considerably for spending too much time on a push for a new Icelandic (‘crowd-sourced’) constitution and on bringing Iceland into the European Union, a project that is now likely to fall apart.  On Saturday, the Social Democratic Alliance lost 16.9% and the Left-Green Movement lost 10.8% from their 2009 result — it means that the Left-Green lost 50% of its 2009 support and the Social Democrats lost about 57% of its 2009 support.

European Union, Iceland

Iceland’s election spells the end for its EU accession hopes

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(110) Tides pushes out at Vik

With capital controls still in place, a massively devalued krónur and galloping inflation, Iceland’s economy is not back to normal.European_Union Iceland Flag Icon

But it’s enough back to normal so that the window for Iceland’s accession to the European Union — or even, as was assumed during the worst days of its 2008 banking crisis, accession to the eurozone — is now very unlikely to happen.

Regardless of whether Sigmundur Davíð Gunnlaugsson and the Framsóknarflokkurinn (Progressive Party) or Bjarni Benediktsson and the Sjálfstæðisflokkurinn (Independence Party) come out on top in Saturday’s election, they are likely to form a center-right coalition that will look to reverse many of the initiatives of the social democratic / leftist government of Jóhanna Sigurðardóttir over the past four years.

Above all, none of the Sigurðardóttir government’s priorities is more endangered than the project of Iceland’s EU accession.  Most news stories note that both a Progressive-led or Independence-led government would slow accession talks, but it seems likelier that Iceland’s next government would essentially end the talks indefinitely — they might not formally withdraw Iceland’s EU application, but they certainly won’t take any action to further discussions.

While Gunnlaugsson has called for a referendum on the eventual result of talks, his party  virtually alone among Iceland’s parties argues that the country should not reimburse the British, Dutch and other governments who reimbursed non-Icelandic depositors who put their savings in Icesave prior to its collapse in 2008.  Benediktsson is hardly any more pro-Europe — he’s argued that Iceland should break off talks altogether and focus on deeper global ties, such as Iceland’s recent free trade agreement with the People’s Republic of China — the first such free trade pact between a Chinese and a European country, likely due to Chinese eagerness to enhance its role in the Arctic north.

If for some reason a Progressive/Independence government does complete the accession talks, the result would be put to a referendum of Icelandic voters who remain highly skeptical of Brussels’s pernicious influence.

Sigurðardóttir’s government formally applied for membership in July 2009 and negotiations began a year later, but with her party likely to return to opposition, the window for Iceland’s EU membership seems likely to end with her government, as Alda Sigmundsdóttir writes today in The Guardian:

So, what makes the Progressive party so popular?

They are vehemently opposed to joining the European Union…. Indeed, many of the Progressives’ policies and declarations lean precipitously towards a new nationalism, with mildly xenophobic stances on issues such as immigration and asylum seekers, and party symbols that are vaguely reminiscent of fascism. The Progressive party was also the party that was most fiercely opposed to Iceland repaying the UK and Holland for the failure of the Icesave online bank.

If [Gunnlaugsson] wins, it will be because Icelanders fear abuse and exploitation by outside forces more than they do a return to the corrupt days of old.

Those are some fairly strong accusations, but I have to wonder if Icelandic voters aren’t simply being rational with respect to EU accession — they already have the benefits of free movement of goods and free borders with Europe, as well as much of the legal harmonization that typically comes with membership and a robust economic relationship with Europe that developed without Icelandic membership.  Why formalize the deal when they already have so many of the benefits of membership without any potential for considerable drawbacks that could harm Iceland’s cherished (and highly protected) fishing industry or the fierce national pride of a uniquely compelling nation that won its own independence from Denmark in 1944? Continue reading Iceland’s election spells the end for its EU accession hopes →

Iceland

Center-right parties poised to return to power in Iceland

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Kim Jong-un, at age 30, is the world’s youngest leader, and there are only a handful of thirtysomething world leaders.Iceland Flag Icon

But if polls are correct, Sigmundur Davíð Gunnlaugsson (pictured above) may lead Iceland’s Framsóknarflokkurinn (Progressive Party) to victory in April 27’s parliamentary elections, giving the Progressives their best victory since 1931 and, perhaps, in its history.  That would make Gunnlaugsson, at age 37, the country’s youngest prime minister since its 1944 independence.

Icelandic voters go to the polls Saturday after a fairly tumultuous time over the past five years following the 2008 collapse of its banking sector, a massive depreciation and the introduction of capital controls on Iceland’s currency, the krónur, despite a return to tepid GDP growth after a 6.5% contraction in 2009 and an unemployment rate that’s now below 5%.

I’ll sideswipe the long debate among American economists over whether Iceland’s economic policy was smarter than that in Ireland or the Baltic states.  If you want an in-depth take from an Icelandic observer, read this instead.  I’ll add that Iceland’s ability to set its own monetary policy certainly helped it bounce back in terms of GDP growth, but it also glided the path for a massive krónur depreciation and inflation that’s eroded those gains that Iceland has made in the past five years.  Much of Iceland’s household debt, before 2008, was denominated in non-krónur currencies, and debt today is otherwise linked to currency or inflation indices.  That has made debt repayment, especially for home mortgages, a grueling nightmare in post-boom Iceland.

So the economic situation is Iceland is complicated, and though there’s a lot of evidence to suggest that Iceland’s economy might even be worse if it were part of the eurozone, that doesn’t mean that the everyday Icelandic voter feels like things are quite back to normal.

But politics, however, do seem set to return to the pre-boom ‘normal,’ given that the Progressives were a longtime ally of the dominant party in Iceland’s history since independence, the Sjálfstæðisflokkurinn (Independence Party), which was formed precisely — as you may have guessed — to enact Icelandic independence from Denmark.

The two parties are now fighting for first place in the April 27 parliamentary elections, and it’s virtually certain that they’ll form the coalition that constitutes Iceland’s next government.  No party in Iceland’s post-independence history has even won an absolute majority in the 63-member Alþingi, Iceland’s parliament.

Polls have shown the Progressive Party with a growing lead throughout 2013, stemming largely from their insistence that Iceland should not reimburse the U.K. and other governments for the Icesave debacle — non-Icelandic savers who had deposited their money in Icesave were wiped out in late 2008, and though their own government have largely made them whole, they have turned to Iceland for repayment with interest.  Although most Icelandic parties agree that Iceland should make the payment, the matter’s been tangled up in both domestic and international litigation, and the repayments are very, very unpopular among the Icelandic electorate.

But the Independence Party seems to be catching up once again, and the two parties are now essentially tied for the lead, meaning that either party could win the greatest number of seats in the Alþingi.  If the Independence Party does edge out the Progressives, Iceland’s new prime minister could be the Independence Party leader, Bjarni Benediktsson (pictured below), who only narrowly survived a leadership challenge a couple of weeks ago, when the party’s polling numbers were more depressed.

bjarni Continue reading Center-right parties poised to return to power in Iceland →