Landslide Victory for Progressive Party May Return Power to Center Right

Parliamentary elections in Iceland on 27 April gave a clear sign to the left wing coalition that its services were no longer required. The center Progressive Party is the winner of the elections, more than doubling its number of MPs. The right wing Independence Party survives, but their leader needs to get into government to maintain hold of party. The Left Green‘s young new leader pushed back to after disastrous polls only two weeks ago, whereas the Social Democrats plummeted to record lows. Two new parties are entering politics, the center party Bright Future, and the Icelandic Pirate Party.

Few expected the Social Democrat-Left Green coalition that took power in Iceland after the country‘s economic collapse to survive the entire electoral term. Nonetheless, they did, despite numerous difficult issues and internal problems in the Left Greens which put the coalition in the situation of governing as a minority coalition for the last months of its reign. Their support by the elections had dwindled, as the old leaders of the parties were weary from repeated battles over the EU, the constitution, and Icesave (Eds.: privately owned Icelandic bank that went bankrupt in October 2008).
The coalition parties promised to continue on the same path as they carved out in 2009, focusing on reviving the economy after having defended the welfare system during major cuts in public expenditures over the last few years. The government has brought inflation down to just under 5%, almost eliminated a budget deficit of over 200 billion ISK in 2009, and unemployment is down to about 4%. But voters seemed to want more and the opposition parties were willing to make promises.
Bjarni Benediktsson, chair of the right wing Independence Party since 2009, promised lower taxes and a simplified taxation system. Polls for the IP reached an all time low in March but an intimate interview with party leader Benediktsson a month before the elections began to turn things around. The IP comes out of the elections with the largest share of the popular vote, 26%, resulting in 19 seats. Nonetheless, this is the second worst result in the IP‘s history, and a skewed electoral system resulted in the Progressive Party claiming an equal number of MPs as the IP. The Social Democrats lost over half of their seats, dropping to 12.9% of the vote and 9 seats (from 29.8% in 2009) and the Left Greens lost half of their seats and vote, earning 10.9% and 7 seats. Numerous new parties ran for parliament in these elections, with two earning seats – the Pirate Party came in with 5% of the vote and 3 seats, and the Bright Future 8% and 6 seats, the best results for a new party in Icelandic history. Nine further parties received a combined 12%, largely – but not exclusively – taking votes from the left and earning no seats.
The Progressive Party is the unequivocal winner of the elections. Party leader Sigmundur Davíð Gunnlaugsson made his name in the campaign against the Icesave settlements and proceeded to enter parliament as the leader of the PP in 2009. Slowly gaining in popularity over the past term, his party‘s support spiked after the EFTA court‘s ruling rejecting the EFTA Surveillance Authority‘s claim that Iceland had violated EU directives by protecting deposits in Icelandic banks. The PP‘s campaign focused on individual debts, promising to use money reclaimed from foreign creditors to lower household debts. The party‘s staunch anti-EU position also garnered support from rural voters. The PP received 24% of the vote, but due to overrepresentation in rural areas stands equal to the IP in Althingi (Icelandic parliament, Eds.) with 19 seats – more than double their 9 seats in 2009.
PP chairman Gunnlaugsson has been given the go-ahead to form a coalition government. He has announced that he will speak to all parties in parliament, although the most obvious result is for the IP and PP form a coalition. They share a pro-industry outlook on the economy and a negative view on the EU application. The parties will try and halt the EU negotiations process, but both have said that they will not continue the negotiations without a referendum on whether to do so. According to polls, however, well over 60% of the population support the completion of the negotiations, although a majority of voters remains skeptical about joining the EU.

Cartoon by Hugleikur Dagsson