European Digest: Iceland, the European Monetary Union, the United Kingdom

Iceland

            Iceland’s main center-right party won the most votes in the Icelandic parliamentary elections, although not nearly enough to govern alone and with a smaller vote total than in the last election when it lost power.  The results nevertheless mean the return to power for the Independence Party that had governed the Scandinavian island state since its independence until four years ago.  As elsewhere in Europe, the debt crisis has created political turmoil in Iceland.

European Monetary Union

            The Cypriot Parliament approved the plan by the European Monetary Union to reduce its debt, which was required in order for Cyprus to receive bailout funds.  Greece is continuing austerity by laying off 15,000 civil servants while France and even the Netherlands are recording budget deficits amidst a poor economy across the Eurozone and much of the rest of Europe.

United Kingdom

            The local elections in England reflected popular sentiment against the two coalition parties, the center-right Conservatives and the far-left Liberal Democrats.  Both parties, especially the latter, lost to the center-left Labour and the euroseceptic United Kingdom Independence Party (UKIP).  UKIP’s showing was the strongest, with over 26% of the vote, suggesting it could possibly wins some seats in Parliament.  The results will encourage the Conservatives to push more forcefully for their proposed referendum on whether to remain in the European Union.  The UK belongs to the EU, but not to the European Monetary Union.  The British have been in favor of returning some sovereignty from the EU.  Immigration and welfare were other issues in the elections amidst the weak economy.  The Tories will now be under increased pressure to do more on these issues and to improve the British economy, lest they lose more ground to UKIP.