How a volcanic explosion could trigger the next French Revolution

The eruption of Icelandic volcano Bardarbunga could have sweeping repercussions for the whole of Europe, and has been pencilled in as an "outrageous" risk for 2015 by Saxo Bank

An aerial view of the volcano eruption at Helluhraun mountain in Bardarbunga, Iceland, in September 2014 Photo: Einar Gudmann/Barcroft Media

By Peter Spence, Economics Correspondent

11 Dec 2014

Yet again, an Icelandic volcano threatens to fracture the political landscape of Europe, just as one did in the 18th century.

An explosion of Bardarbunga could wreak agricultural havoc, shifting weather patterns, and leading to a doubling of grain prices.

The economic pain inflicted on already fragile France could usher in a new political era, as voters reach a tipping point.

As the volcano Bardarbunga has been "quietly" erupting for more than 100 days, it could now enter "a far more intense eruption phase", said John Hardy, head of FX strategy at Saxo Bank.

This would result in "potentially climate altering consequences for the next year or more", he added.

The forecast is one of a series of "outrageous predictions" made by Denmark's Saxo Bank for 2015, events which are unlikely, but represent under-appreciated risks over the next 12 months.

This event would be far larger than the 2010 eruption of Eyjafjallajokull, which the International Air Transport Association said cost airlines around £1.1bn.

The eruption of Laki in 1783 - another Icelandic volcano - has been credited as a catalyst for discord in Europe, and the French Revolution of 1789.

Throwing up more than three cubic miles of lava, Benjamin Franklin noted that clouds of ash had led to a "constant fog over all Europe, and a great part of north America" after the Laki eruption.

The cloud of noxious gas settled over the continent, resulting in mass livestock deaths and the decimation of crops. The food scarcity that followed would eventually lead to unrest in France.

^{Bardarbunga has been erupting for more than 100 days.}

Steen Jakobsen, chief economist at Saxo Bank, suggested that of the 10 scenarios presented for next year, a Bardarbunga eruption is the least "outrageous" - with a 50:50 chance of coming true.

More than 230 years on from the Laki eruption, an already strained France could enter a "second French Revolution" if the eruption came to pass, Mr Jakobsen added.

Whether 2015 really will be the year Bardarbunga wakes up in such a violent fashion remains anyone's guess.

The volcano was briefly assigned a "red" warning, in August. The Icelandic Met Office's description states that this signified an imminent risk of eruption, with a significant emission of ash into the atmosphere likely.

Triggered by an earthquake in August, Bardarbunga has now been continually erupting for more than 100 days, and is presently considered at an "orange" threat level, the second highest of five risk ranks.

^{Present volcanic activity is occuring far from major cities.}

The current "period of seismic unrest is one of the largest ever recorded in a volcano globally", Iceland's own Civil Protection and Emergency Management has said.

The agency has laid out three likely scenarios, two of which would involve an ash-producing jokulhlaup, throwing up clouds of matter.

Other "outrageous predictions" made by Saxo Bank for 2015 include a looming chocolate shortage, a Russian government default, and a Ukip landslide in next May's elections.