Iceland’s Eyjafjallajokull volcano continued to spew ash April 21, although at lower altitudes than during the previous five days. Up to 75 percent of Europe’s flights are expected to return to normal as result of the shift in Eyjafjallajokull’s activity level. The ash cloud has affected air cargo transport and many of Europe’s airlines. Because of its economic effects, the ash cloud could end up having political effects in Europe as well.
The volcano under Iceland’s Eyjafjallajokull glacier continued spewing ash into the atmosphere April 21, though at an altitude of around 1.8 miles. This is far lower than the 3.7-6.8 miles the ash reached during most of the recent eruption, which began affecting European air travel April 14. The changes in ash altitude have allowed most airlines to slowly begin getting back to regular schedule, with Europe’s air traffic on its way to 75 percent of capacity April 21. Furthermore, seismologists in Iceland have said the worst of the eruption is probably over. However, there is still a chance that winds could circulate the ash already above Europe, thus continuing to impede air traffic. (See the graphic below showing the Norwegian Meteorological Institute’s forecast of ash cloud progression to April 23).
Europe is downwind from the volcano eruption in Iceland, and so has borne the brunt of the ash cloud’s adverse effects. The first such adverse effect is on Europe’s air cargo supply chain.
In terms of weight — often the standard measurement of transportation — air cargo only accounts for 1-2 percent of transportation conducted in Europe, as widely reported by the media. However, in terms of value, air cargo amounts to 10.6 percent of the European Union’s total trade. The disparity between weight and value is particularly acute for the United Kingdom, which not only is geographically isolated from its main EU trade partners but also is a highly advanced economy with a robust pharmaceutical sector. For the United Kingdom, air cargo accounts for 13.3 percent of trade value, not weight.
All of Europe’s advanced economies rely on air cargo for approximately 6.5-10 percent of overall trade turnover. The prolonged disruption in air traffic eventually will force exporters to find alternative supply chain mechanisms — enriching railway, truck and sea shipping companies in the process — but some products that rely on next-day delivery, like certain medicines and food items, could very well suffer irreversible losses.
This is a problem for Northern Europe’s economies, which are particularly reliant on air cargo transportation due to the economies’ technological advancement and dependence on “just-in-time” supply chain logistics. These supply chains enable the delivery of components critical to the manufacturing process very close to when they will actually be used, but they also make such business more vulnerable to even slight disruptions. Northern European economies also produce high-value but low-weight finished products, such as microchips and pharmaceuticals, which need to be shipped quickly to destinations around the world. A number of key northern European countries — not only the United Kingdom, but also Denmark, Sweden and Finland — also are relatively geographically isolated from the European continent, and it simply makes economic sense for these countries to fly their exports out rather than send them by ship or rail.
The effects of the ash cloud come amid ongoing economic problems for Europe, where the economy saw little growth in the fourth quarter of 2009 and a tepid recovery in the first quarter of 2010. The short-term effects of the ash cloud most likely will not be severe enough to derail recovery, but the current political climate in Europe is sensitive to even the smallest adverse economic events. Considering the countries being affected are mainly the large northern European economies — the same countries currently deciding the fate of Greece in the context of the eurozone and the EU — the ash cloud’s aftermath could compound an already negative public opinion of rescuing Greece and other profligate spenders in Club Med (Portugal, Italy and Spain), especially if bailing out various national airlines becomes necessary.
Volcanic ash impedes air travel because it can wreak havoc with jet engines. Ash sticks to the interior parts of the jet engine — particularly turbines, where the heat from the plane’s engine melts it into a coating that can restrict air flow through the engine. According to the International Air Transport Association, the airline industry is losing $250 million per day as result of the ash cloud, and in total has estimated losses to be around $1.7 billion. Major airport hubs, which are a key component of many local economies — and are major employers — in major European cities also are suffering daily losses that could lead to layoffs if the delays continue. Travel disruption also could wreck what was going to be an already dismal tourist season in Mediterranean Europe — particularly in troubled Greece where tourism accounts for around 18 percent of gross domestic product and where most tourists come from northern Europe.
Aside from the economic consequences, there also are rumblings in Europe that the European Union did not handle the crisis competently. French Foreign Minister Bernard Kouchner said April 21 that the EU “failed” to act in the crisis. The criticism leveled at the EU is unsurprising since cross-border crisis events usually elicit criticism of the union’s efficiency, even when it does not have policy competence to resolve such problems. In this case, closing various national airspaces was a decision made at the nation-state level. While the knee-jerk reaction in Europe to blame the EU for everything — even a volcano eruption in Iceland — may be an amusing anecdote from the event, it actually reaffirms the fact that Brussels is slowly losing what little legitimacy it had in the eyes of Europe’s public. In the current environment of economic recession, political elites will not be able to ignore and dismiss such criticism.
Potential Long-Term Effects
Nobody can accurately predict the seismic activity of a volcano, especially STRATFOR, which specializes in geopolitical rather than geological forecasting. However, in the long term the Eyjafjallajokull glacier volcano is not as big a problem as its neighbor, Katla.
According to climatologists, the current eruption is not producing enough sulfur dioxide to produce a significant climatological effect, such as blocking out the sun long enough to adversely affect Europe’s temperature. However, nearby Katla, which has erupted in tandem with Eyjafjallajokull in the past and seems to have been triggered by Eyjafjallajokull’s eruptions before, could produce such an effect. One of Katla’s major eruptions in the early 1700s resulted in such extreme cold temperatures on a global scale that the Mississippi River froze just north of New Orleans.
Another Icelandic volcano, Laki, is not in danger of erupting due to the current volcanic activity, but in the past it has produced what could be considered a worst-case scenario of the potential effects of an Icelandic volcano eruption. It is a scenario worth examining when discussing what a potential major Katla eruption could do. In 1783, Laki erupted for eight months, allegedly causing a drop in Europe’s surface temperature. Aside from eventually killing a fifth of Iceland’s population through the expulsion of toxic fumes and livestock degradation, Laki’s thick ash cloud is postulated to have affected Europe’s agriculture so dramatically that it contributed to the eventual social unrest leading to the 1789 French Revolution. Adverse health effects were also recorded in Europe, with a rise in deaths in the United Kingdom and France in particular.
The Eyjafjallajokull eruption could end soon, although it is difficult to tell how much longer the ash cloud will continue to swirl around Europe. It will take both the abating of the ash expulsion and a change of wind patterns for air traffic to return to normal completely. But with Europe already in a testy mood due to the slow economic recovery, arguments between EU member states on how to bail out Greece and rising economic and political nationalism, the ash cloud could cast more than just an economic pall on the continent by affecting its policies.
