Iceland's Ruling Conservatives Emerge Weakened After VoteBy
Country now likely faces protracted talks on forming coalition
New government will need to manage a slowing economic boom
Iceland faces politically tumultuous times after the conservative ruling party was weakened in a snap vote, with a potential center-left majority emerging after the nation’s third election in four years.
The Independence Party won 25.3 percent of the vote, down from 29 percent last year. Its closest challenger, the Left Green Movement, rose to 16.9 percent, and could potentially helm a multi-party coalition. Former Prime Minister David Sigmundur Gunnlaugsson, forced out last year by yogurt hurling protesters after his name was found in the Panama Papers, reemerged as a big winner, getting 10.9 percent with his newly formed Center Party.
The country is now in an "unprecedented” situation with a new political reality that will require everyone to be "broad minded,” Prime Minister Bjarni Benediktsson said early Sunday in a televised party leader gathering on state-broadcaster RUV.
The 47-year-old premier has been handed a tricky puzzle with eight parties in parliament and no sure path to forming a government. The current opposition parties secured a one seat majority in the 63-seat parliament, but it’s unclear whether they can coalesce. It’s up to Iceland’s President to decide on who will get the mandate to start coalition talks.
With a strong economy at his back, Benediktsson held on as the largest party after he was forced to call a snap election as his three-party center-right coalition collapsed amid a controversy involving the granting of clemency to a convicted child molester. His coalition partner, Revival, lost almost half its support and his other partner, Bright Future, was voted out of parliament.
The other big winner was the Social Democratic Alliance, which doubled to its backing about 12.1 percent while the Pirate Party faded after last year emerging as a political force, winning 9.2 percent. The centrist Progressive Party slid to 10.7 percent while the People’s Party, a disability and elderly rights party, will make it into parliament for the first time, winning 6.9 percent.
There will now likely be protracted talks on forming a government. Last year’s election was followed by almost two months of talks before a viable coalition could be formed.
Party leaders from the Left Greens and the Progressives urged new thinking to head off more instability as they gathered on Sunday.
“It’s important in politics to create a broader togetherness and approach this with a another way we have done before and I think that is an exciting challenge,” Left Green leader Katrin Jakobsdottir said in a RUV broadcast Sunday. The 41-year-old Left Green leader is popular, with a recent poll showing nearly one in two voters wanting her to become premier.
The Left Greens have advocated increasing tax and more spending on health care and infrastructure.
The election comes at a crucial juncture for the Icelandic economy, which is showing signs of a slowdown after its long recovery from the financial crisis. Much of the debate has centered on the need to rebuild the country’s infrastructure and on how to avoid another round of financial instability.
Benediktsson, who earlier this year oversaw the exit from capital controls in place since 2008, has pledged to use surpluses to cut taxes, rebuild infrastructure and spend more on health care. The country has also been able to reduce state debt with revenue raised from deals with the creditors of the banks that failed in 2008.
The Independence Party has been the biggest group in all but one of the elections held since Iceland split from Denmark in 1944. Benediktsson has proved a resilient politician. His name also surfaced in the Panama Papers and this month The Guardian newspaper and Icelandic media reported that he had sold “several million krona” in assets in a Glitnir Bank fund ahead of the collapse in 2008, citing leaked documents. He has denied any wrong doing.
Benediktsson said on Sunday that it was natural that he is given the mandate and that the Independence Party is part of any government unless a five to six party majority emerges.