Global Financial Crisis Fuels Political Unrest in Eastern Europe and Iceland

Latvians gathered in Riga's Old Town this month to peacefully protest their government's handling of the economic crisis. Afterward, a riot erupted.
Latvians gathered in Riga's Old Town this month to peacefully protest their government's handling of the economic crisis. Afterward, a riot erupted. (By Roman Koksarov -- Associated Press)
By Philip P. Pan
Washington Post Foreign Service
Monday, January 26, 2009

RIGA, Latvia -- On a frigid evening this month, more than 10,000 people gathered outside a 13th-century cathedral in this Baltic capital to protest the government's handling of Latvia's economic crisis and demand early elections. The demonstration was one of the largest here since the mass rallies against Soviet rule in the late 1980s, and a sign of both the public's frustration and its faith in the political system.

But at the end of the night, as the crowd dispersed, the protest turned into a riot. Hundreds of angry young people, many drunk and recently unemployed, rampaged through the historic Old Town, smashing shop windows, throwing rocks and eggs at police, even prying cobblestones from the streets to lob at the Parliament building.

Similar outbursts of civil unrest have occurred in recent weeks across the periphery of Europe, where the global financial crisis has buffeted smaller countries with fewer resources to defend their economies. Especially in Eastern Europe, the turmoil reflects surging political discontent and threatens to topple shaky governments that have been the focus of popular resentment over corruption for years.

Europeans have compared the unrest to events of the 1960s and even the 1930s, when the Great Depression fueled political upheaval across the continent and gave rise to isolationism and fascism. But no ideology has tapped into public anger and challenged the basic dominance of free-market economics and democratic politics in these countries. Instead, protesters appear united primarily by dashed economic hopes and hostility against the ruling authorities.

"The politicians never think about the country, about the ordinary people," said Nikolai Tikhomirov, 23, an electronics salesman who participated in the Jan. 13 protest in Riga. "They only think of themselves."

Days after the riot, a demonstration by 7,000 protesters in neighboring Lithuania turned violent, leading police to respond with rubber bullets. Fifteen people were injured. Smaller protests and clashes have erupted in Bulgaria, the Czech Republic and Hungary, following weeks of street violence in Greece last month. On Thursday, police in Iceland used tear gas for the first time in half a century to disperse a crowd of 2,000 protesting outside Parliament in Reykjavik. The next day, Prime Minister Geir Haarde agreed to call early elections and said he would step down.

Dominique Strauss-Kahn, head of the International Monetary Fund, said the financial crisis could cause further turmoil "almost everywhere," listing Latvia, Hungary, Belarus and Ukraine as among the most vulnerable nations. "It may worsen in the coming months," he told the BBC. "The situation is really, really serious."

There is particular concern about the relatively young and sometimes dysfunctional democracies that emerged after the fall of communism in Eastern Europe, where societies that endured severe hardship in the 1990s in the hope that capitalism and integration with the West would bring prosperity now face further pain.

"The political systems in all these countries are fragile," said Jonathan Eyal, director of international security studies at the Royal United Services Institute, a research group in London. "There's a long history of unfulfilled promises and frustration with the political elites going back to the Communist era."

Eyal warned of a revival of ethnic conflict in the region, where most countries have large minority populations, adding that tensions could rise after workers who have lost jobs in Western Europe return home. But he noted that extreme nationalist movements have won only limited support in Eastern Europe in recent years.

"People here instinctively know the idea of a strongman who imposes order doesn't work," he said, arguing that the region's history with Communist rule, its integration with the European Union and its anxiety about Russia's intentions make a turn toward authoritarianism unlikely. "They have seen the past, and a return to previous populist schemes isn't very persuasive. At the end of the day, they know there's no alternative to the market economy."

That assessment rings true in Latvia, where the government's approval ratings have fallen as low as 10 percent -- the worst in the European Union, and lower than at any other time in the nation's post-Soviet history -- but where people scoff when asked if they want to abandon markets and political freedoms.

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