Iceland has no army, no navy and no air force - but it does have riot police.

On Tuesday night the black-uniformed troopers came out to quell the latest riots in Reykjavik, which erupted in front of parliament. The building was splattered with paint and yoghurt, the crowd yelled and banged pans, shot fireworks and flares at the windows and lit a fire in front of the main door.

Yesterday the protesters gathered again, hurling eggs at the car of Geir Haarde, the Prime Minister, and banging cans on its roof.

The transformation of the placid island into a community of seething anger - there have been half a dozen riots in recent weeks - is more than a regional oddity.

In Riga last week 10,000 protesters laid siege to the Latvian parliament; yesterday hundreds of Bulgarians rallied to demand that the Socialist-led Government should take action or step down, in a second week of demonstrations, and last month the police shooting of a 15-year-old Greek boy led to days of running battles in the streets of Athens and Salonika.

The protests went beyond the usual angry reflexes of societies braced for recession. The Greek riots heralded sympathetic actions across the world, from Moscow to Madrid, and in Berlin the Greek Consulate was briefly stormed. The Riga unrest spread rapidly to Lithuania. It is, some say, just the beginning: 2009 could become another 1968 - a new age of rebellion.

The LSE economist Robert Wade addressed about 1,000 Icelanders recently at a protest meeting in a Reykjavik cinema, warning that large-scale civil unrest was on the way. The tipping point, he said, would be this spring.

“It will be caused by the rise of general awareness throughout Europe, America and Asia that hundreds and millions of people in rich and poor countries are experiencing rapidly falling consumption standards; that the crisis is getting worse, not better, and that it has escaped the control of public authorities, national and international,” he said.

The global liquidity emergency became a full-blown crash so quickly that there was no time to hold governments to account. Now leaders all over Europe have declared themselves to be the saviours of the economy and are nationalising assets, extending loans and guarantees to failing banks and manufacturers. But the price is high: unemployment is starting to soar and cuts in public spending are hurting hospitals, schools and universities. Personal bankruptcies are at record levels.

Every segment of society has been hit, but it is the young who feel the pain most - and just as in 1968, it is they who are leading the rebellion.

The Greek disturbances, the worst since 1974, were triggered by the killing of the teenager, but the anger was stoked by a sense that the young were going to have to pick up the bill for the miscalculations of the political class. Unemployment among Greeks aged 15 to 24 has reached 21.2 per cent; for 25 to 34-year-olds it is 10.5 per cent. The good years have come to an end suddenly.

The boom in Iceland led to the few narrow streets of the capital becoming jammed with expensive 4×4s. Latvia had double-digit growth for years; now GDP is set to contract 5 per cent in the coming year and Latvian youths are beginning to rail against mismanagement and corruption.

In the EU, migration was always a way out of a tight domestic labour market. No more: the sheer magnitude of the recession means there is no easy escape. There are reports of anti-immigrant trouble brewing in Spain. Usually at this time of year migrant workers, most of them from Morocco, pile into the country to pick strawberries. This year the Spaniards are making it clear that they are unhappy about migrants taking jobs.

Each flare-up touches on a separate aspect of the crisis. In Greece it was partly about the failure of the education system (as in 1968). In Vilnius it was over high taxes. In Iceland it is about massive debt. In Russia unrest in Yekaterinburg and Vladivostok was about dearer car import duties.

But there are common threads. Across Europe, protesters demand a change of government. Politicians in wealthier countries can try to prop up banks and industries, but it does not work in heavily indebted nations with bloated and exposed financial sectors.

And there is a shared shock that the good times have gone. “The explosion conceals a compressed desperation,” the Greek psychology professor Fotini Tsalikoglou said of last month’s outburst in Athens. “Many young people live with the unbearable knowledge that there is no future.”

New age of rebellion and riot stalks Europe

Tony Blair is poised to become the first President of Europe after it was confirmed that French leader Nicolas Sarkozy is determined to help him win the post.

A senior aide to President Sarkozy told a private gathering of senior British and French politicians that he is to tell fellow EU leaders that Mr Blair is the only man who can help Europe stand up to the rest of the world.

The remark by Alain Minc, a key member of Mr Sarkozy’s inner circle, is the second French blow to Gordon Brown’s standing in two days, coming after Mr Sarkozy said Mr Brown’s decision to combat the recession by cutting VAT was a ‘mistake’.

Mr Minc, a political wheeler-dealer, entrepreneur and TV show host, was attending a meeting last month of the Franco British Colloque, a high-powered discussion group of British and French politicians, civil servants and opinion-formers.
Members are under orders not to reveal the confidential discussions, but The Mail on Sunday has established that Mr Minc used the meeting to win support for Mr Sarkozy’s campaign to ensure Mr Blair becomes the President of Europe.

The role is due to be created next year – but only if the EU’s controversial Lisbon Treaty is ratified in the autumn by Ireland and the Czech Republic, the two EU countries which have so far refused to do so.

Mr Minc told the gathering, which was also attended by French Prime Minister Francois Fillon: ‘When the Lisbon Treaty is ratified, Europe will move into a new phase. Europe will need a strong leader and Nicolas Sarkozy will nominate Tony Blair for the position.’

Mr Minc explained why Mr Sarkozy was determined to overcome opposition to Mr Blair from a handful of EU leaders, notably German chancellor Angela Merkel.

He said: ‘We have to unite and say to Mrs Merkel that we cannot afford not to have Tony Blair, who will be a strong figurehead, is entirely respected around the world and will be a commanding leader at the helm of Europe.’

Mr Minc has been described by one commentator as ‘France’s Peter Mandelson’. Indeed, his AM Conseil consultancy has employed Lord Mandelson as an ‘adviser’ in the past and the two are members of the Policy Network think-tank.

The conference took place in Versailles, days after Mr Blair visited Paris to chair a conference for Mr Sarkozy on the economic crisis, in what was seen as the latest part of a charm offensive to boost his chances of winning the EU presidency.

Mr Blair paid glowing tribute to Mr Sarkozy’s recent performance in the rotating EU presidency, saying: ‘Under his leadership, Europe looked as if it were acting in concert.’

Mr Blair was referred to as Prime Minister Blair throughout – Mr Brown was not even invited.

The post of President of the EU’s Council of Ministers will replace the current system under which the EU nations on a six-monthly basis. Supporters say it is the only way to give the presidency rotates among EU a strong voice.

Critics claim it is another step on the road to a European superstate.

President Blair? - Former PM set to become EU chief