The Fallen

The 12 European leaders taken down by the financial crisis.




Lost power: Feb. 1, 2009



Lost power: Feb. 1, 2009

Circumstances: Iceland’s banking crisis was something of a preview of things to come for the rest of the continent, and its government was the first to fall as a direct result of the economic crisis. Haarde, who had been in office since 2006, announced his coalition’s resignation following weeks of street protests after Iceland’s overleveraged banking sector collapsed.

Current state of play: Haarde was succeeded by Jóhanna Sigurdardóttir, the country’s first female prime minister and the world’s first openly gay elected head of government. After a dismal couple of years — gross domestic product (GDP) contracted 9.6 percent in 2009 — the bleeding now appears to have stopped, with growth projected at 2.5 percent for this year. A fierce debate over whether to join the European Union is likely in the coming year.



Lost power: March 12, 2009

Circumstances: Godmanis, who had been in office for just a little over a year, submitted his resignation to Latvia’s president amid violent street protests, 50 percent unemployement, and a GDP contraction of 10.5 percent in the last quarter of 2008. President Valdis Zatlers nominated former Finance Minister Valdis Dombrovskis to succeed him. 

Current state of play: The financial crisis has decreased Latvians’ real incomes by about 19 percent, according to the International Monetary Fund (IMF). The government has been forced to pass spending cuts and tax increases equal to about 15 percent of the country’s economic output as a condition of IMF assistance. Growth is projected to return this year, but unemployment remains high and there’s a major question mark over whether Latvia will be able to join the eurozone.



Lost power: April 14, 2009

Circumstances: Gyurcsany became Hungary’s only post-communist prime minister to be reelected in 2006, but riots erupted shortly after when he admitted on a leaked tape that he had lied about the country’s finances to get reelected. Unable to push through economic reforms, the Socialist leader Gyurcsany resigned, calling himself an “obstacle” to the country’s efforts to recover from the credit crisis.

Current state of play: The Hungarian economy remains in a fragile state, with unemployment rising, business confidence dropping, and talks on badly needed European Union and IMF aid breaking down last month. Additionally, there are concerns about the future of Hungarian democracy following current Prime Minister Viktor Orban’s crackdowns on the free press and controversial amendments to the constitution.  



Lost power: Feb. 25, 2010

Circumstances: In 2005, Yushchenko was a global democratic darling thanks to the “Orange Revolution” that brought him to power, overturning the results of a fraud-ridden election. By 2009, thanks to a worsening economic climate and political dysfunction, Yushchenko had the unenviable distinction of leading the world’s least popular democratic government, with an approval rating of just 4 percent. In the 2010 election, Yuschchenko finished fifth, with just 5.5 percent of the vote. His former Orange Revolution rival Viktor Yanukovych took back the presidency.

Current state of play: Ukraine’s economic outlook continues to be grim, with growth slowing toward the end of last year, unemployment at about 8.5 percent, and growing rates of homelessness. Additionally, NGOs say Yanukovych has nearly wiped out Ukraine’s recent democratic gains with attacks on the free press, civil society, and the prosecution and arrest of Yushchenko’s former prime minister and revolutionary ally Yulia Tymoshenko, widely believed to be politically motivated



Lost power: March 9, 2011

Circumstances: With historically low approval rates over his handling of Ireland’s banking collapse, Cowen stepped down as head of his Fianna Fail party in January 2011, but stayed on until elections in March. But it couldn’t save the party that had ruled Ireland for 60 of its 80 years of independence — Fianna suffered the worst political collapse in Irish history. 

Current state of play: Following harsh austerity measures pushed through by current Prime Minister Enda Kenny’s government and a $113 billion EU/IMF bailout in 2010, things seemed to be looking up for Ireland in 2011, with growth rates exceeding those of France and Germany. Unfortunately, the Irish economy is now projected to grow by only 1.3 percent in 2012, well below the government’s previous predictions. Unemployment remains at 14.2 percent — and that’s artificially low, given the record numbers of young Irish who are seeking work abroad.   



Lost power: May 11, 2010

Circumstances: Brown arrived at 10 Downing Street in 2007 after 10 years as Tony Blair’s chancellor of the exchequer. But his premiership was quickly derailed by Britain’s spiraling credit crisis — with debt reaching 12 percent of GDP — the same level as Greece, at the time — and unemployment doubling by the time the 2010 election rolled around. Labour lost 91 seats in the election and after 5 days of backroom negotiations, David Cameron formed a coalition government with Liberal Democrat leader Nick Clegg.

Current state of play: The British economy has continued to shrink under Cameron, forcing the prime minister to defend the harsh austerity measures he has pushed through, though the Tories still enjoy an edge in popularity over Labour. The Bank of England is expected to announce within days that it is pumping billions more pounds into its quantitative easing program.



Lost power: June 21, 2011

Circumstances: With a similar debt crisis to Greece and Ireland, Sócrates first resigned in March 2011 after five opposition parties in Parliament rejected his austerity program, which included spending cuts and tax increases. It was the fourth round of austerity cuts that Sócrates had tried to push through that year and followed the approval of a $111 billion EU/IMF bailout deal for the country. Sócrates stayed on to lead a caretaker government until June, when his Socialist Party was defeated by Pedro Passos Coelho’s Social Democratic Party.

Current state of play: Portugal continues to be mired in one of the world’s deepest recessions, with its economy projected to contract 3 percent this year and unemployment at 13.6 percent. Despite a debt-to-GDP ratio of around 105 percent, Coelho says Portugal’s debt load is sustainable. “We will not allow what happened in Greece to happen here,” he said this week. 



Lost power: Nov. 10, 2011

Circumstances: Papandreou took power in 2009, promising to help right Greece’s struggling economy and clean house after a series of corruption scandals. But after two years marked by painful austerity cuts, violent public demonstrations, and humiliating bailouts, Papandreou bowed out. The last straw was Papandreou’s plan to hold a referendum on a bailout deal, which infuriated Greece’s European creditors. Papandreou was replaced by Lucas Papademos, a former European Central Bank official with strong backing from Brussels. 

Current state of play: Despite his international credentials, Papademos has found it equally difficult to push austerity and bailout bills through an increasingly hostile Greek government and electorate. This week, Papademos and the leaders of the three parties supporting his government appeared to reach a deal which includes a controversial 22 percent reduction in the minimum wage in exchange for a new 130 billion euro bailout.



Lost power: Nov. 16, 2011

Circumstances: The three-time prime minister had survived a series of criminal and sexual scandals that would have brought down most politicians years earlier, but he finally announced his resignation last year after his failure to implement much-needed economic reforms prompted a revolt within his own party and a rift with his main coalition ally. President Giorgio Napolitano invited economist and former European Commission official Mario Monti to form a government following Berlusconi’s resignation.

Current state of play: Since taking power, Monti has unveiled a sweeping austerity package which includes severe tax increases. Reaction from global markets has been positive. And European leaders likely breathed a sigh of relief over Monti’s no-nonsense style after Italian borrowing costs had approached Greek levels under Berlusconi. However, the goodwill from the continent may not last long, with the former eurocrat repeatedly taking public shots at Germany, calling it the “ringleader of global intolerance.”



Lost power: Dec. 21, 2011

Circumstances: Zapatero, who came to power in 2004, had only planned to sit for two four-year terms. But with Spain mired in its worst recession in 60 years, the prime minister stepped down early to give his Socialist Party a better chance of retaining power. Nonetheless, the party suffered its worst defeat since Spain’s return to democracy. Conservative politician Mariano Rajoy took power promising sweeping economic reforms.

Current state of play: Rajoy inherited and unemployment rate of 22.8 percent and a budget deficit of 8 percent. His government passed a $20 billion austerity plan in January and plans to introduce a new labor plan next month.



Lost power: Feb. 6, 2011

Circumstances: Romania’s economy actually grew last year, but not enough to save Boc, in power since 2008, who resigned this week amid large street protests. Boc had passed a 25 percent cut in public sector wages and new sales taxes in Europe’s second-poorest country in order to continue to qualify for IMF loans. Romania’s president named intelligence chief Mihai Razvan Ungureanu as Boc’s successor.

Current state of play: Ungureanu has unveiled his new caretaker government, which is awaiting approval by Parliament. National elections are scheduled for next November, but those are likely to be moved up to the summer. The left-wing USL party is currently leading in the polls over the center-right coalition that includes both Boc and Ungureanu’s parties. The economy is expected to grow at between 1.5 and 2 percent this year, but has a long way to go to catch up to pre-crisis levels.



Lost power: Will step down following election on March 10, 2012

Circumstances: The world’s eyes briefly turned to Slovakia in October 2011, when the country’s Parliament voted on approving the expansion of the eurozone’s bailout fund, putting economic rescue plans for Greece and Italy in jeopardy. Radicova had threatened to resign if the motion was defeated, which it was — by 21 votes. There was little appetite for bailing out Greece in one of the eurozone’s poorest countries, which is itself facing high unemployment and sluggish growth. Parliament eventually approved the motion, under heavy E.U. pressure, two days later, but Radicova’s government had already fallen.

Current state of play: New parliamentary elections are scheduled for March — but without Radicova, whose short tenure as Slovakia’s first female prime minister will come to an end. The leftist Smer Party, led by Radicova’s predecessor as prime minister, Robert Fico, seems likely to win by a large margin.

Joshua E. Keating was an associate editor at Foreign Policy.

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