Analysis | Iceland’s political parties have been working overtime since October to set up a government. Now that they have one, it is time for the hard work to begin
Following more than two months of formal and informal meetings between the seven political parties that earned seats in the Icelandic parliament after the October 29 elections, a new coalition government was finally negotiated this week, with Bjarni Benediktsson (pictured above, at centre), chief of the centre-right Sjálfstæðisflokkurinn/Independence Party (IP) set to become the next prime minister.
The IP will govern in coalition with two smaller parties with centrist policies, Björt Framtíð/Bright Future and Viðreisn/the Regeneration Party (created in 2012 and 2016 respectively). After an unusually long period of coalition-building consultations, Reykjavík’s next government must operate with a paper-thin majority, with 32 seats of a total of 63, and likely a boisterous opposition given the significant number of seats won by the Vinstrihreyfingin-Grænt framboð/Left-Greens (VG) and the outsider Píratar/Pirate Party (with 10 seats each).
These elections were the latest chapter in an Icelandic political drama lasting almost a decade. In late 2008, the country unwittingly became one of the most visible examples of both the global economic crisis and the financial tribulations which continue to rock most of Europe.
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Although the worst of Iceland’s economic trauma is now in the past, the political aftershocks of the Icelandic economic downturn, (known locally as the kreppa), are still being felt. Traditional parties of government, especially on the centre-right, last year were challenged not only by the moderate and environmentalist left but also by new parties which either attempted to build a centrist and/or progressive identity, or in one case, (Píratar), sought to become an ‘anti-politics’ party.
While many parts of western Europe faced a resurgence of far-right parties in recent elections, Iceland responded to uncertain political (and economic) times by adding still more hues to an already colourful political spectrum in the months before last autumn’s vote.
This coalition deal was struck after several previous attempts among the septet of largest parties to piece together a working partnership capable of carrying a majority and to effectively govern as a unit. When initial talks sponsored by Mr Benediktsson between the IP, Björt Framtíð and Viðreisn were unsuccessful, the mandate to form a government was passed to Katrín Jakobsdóttir, head of the VG, to attempt to form an ambitious (and unprecedented) five-party coalition among the opposition parties.
When that task proved too complicated, and an attempt to create a grand left-right partnership between the IP and the VG also proved fruitless, it was the turn of Birgitta Jónsdóttir, of Píratar, who attempted to again bring together the five opposition parties to form a unity government.
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When that endeavour failed as well, the country began to face the looming and unpalatable options of either a minority government, which would likely have been quite short-lived given the fragmented state of the current parliament, or a snap election. Much of the reason why so many of these negotiations failed was based on differences over economic policies.
The incoming government is in some ways an awkward arrangement given the bumpy history between the IP and Viðreisn. One of the main rationales for the founding of the latter party was frustration with the IP over its reluctance to support a referendum on membership in the EU. Although public opinion continues to reflect strong opposition to the idea, with the latest poll, taken on December 1, by MMR, a sampling firm, suggesting 52.7% against membership and 25.9% for, there has also been widespread public support of bringing the EU question to a referendum, and there were protests in March 2014 on Austurvöllur Square opposite the parliament building calling for a popular vote on the matter.
Iceland had applied to join the EU in 2009 as the country’s economy began the difficult recovery process from the kreppa, and discussions about adopting the euro as a replacement currency for the critically devalued króna were taken very seriously. However, as Iceland’s economy grew stronger, popular support for future EU engagement waned, and the previous government coalition, consisting of the IP and Framsóknarflokkurinn/the Progressive Party, ultimately withdrew the country’s application in early 2015.
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Many prominent members of Viðreisn were in favour of both an EU membership referendum and more liberalised trade for Iceland, and any partnership between that party and IP was seen as hinging upon some kind of compromise over the EU question. Earlier this month, Mr Benediktsson had reiterated his opposition to holding a referendum as part of any co-operation negotiations. Also, Viðreisn had stated before the election that it would not seek a partnership with either IP or Framsóknarflokkurinn.
Ultimately, the incoming three-party coalition government announced this week that it would be accepting of calls for a parliamentary vote on whether to hold a countrywide referendum on joining the EU. Whether such a plebiscite actually takes place, however, is another story, given the IP’s continued resistance to the idea, and this could continue to be a sore point between the IP and Viðreisn.
At present, Iceland is outside the union, yet is a member of the Schengen passport-free area and is partially within the EU’s single market. Iceland is also, along with Liechtenstein, Norway and Switzerland, a member of the European Free Trade Association.
In a statement shortly after the new coalition was announced, a policy platform (in Icelandic) was unveiled which appeared to address a broad range of domestic and international issues, including promises of greater support for regional and EU co-operation and engagement with the Arctic Council.
Yet, all may not be smooth sailing for the incoming administration. The Píratar, which had been widely touted before the election as likely to join the next government, hinted (in Icelandic), but stopped short of confirming, that it may seek a vote of no-confidence against the new coalition shortly after it sits.
Mr Benediktsson also assumes the leadership with some political baggage, including links to the Panama Papers offshore investment scandals early last year when he was serving as Finance Minister. Although many in Iceland may be hoping for a period of quiet after a tumultuous political season, the next few months may very well be anything but placid.
The author is a senior research fellow at the Norwegian Institute of International Affairs, in Oslo. His latest article, “‘Have You Entered the Storehouses of the Snow?’ China as a Norm Entrepreneur in the Arctic” has just been published in the journal Polar Record.
Originally published by The Arctic Journal. Re-published here with the permission of the author.
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