Iceland’s Election: Another Cooperation Game?

The election in Iceland on 28 October was probably a source of frustration for many, as the results did not produce the watershed political shift for which many were hoping, especially in the wake of two previous governments being toppled by political scandal. Moreover, the outcome of this year’s vote produced no clear winner and no possibility of a two-party coalition given the distribution of seats among eight parties representing ideologies across much of the country’s political spectrum.

The stage is now set for another round of coalition talks likely to be led by the two parties with the biggest vote share, namely the Independence Party (Sjálfstæðisflokkur) with sixteen seats in the 63-seat parliament (Alþingi) and the Left-Greens (Vinstri græn), or VG, with eleven. Although the IP lost five seats in the wake of the vote and despite recent political scandals, the party nonetheless was able to maintain its core level of support, likely due to the robust state of the Icelandic economy. However, IP’s two previous coalition partners, Regeneration/Reform (Viðreisn) and Bright Future (Björt framtíð), were heavily punished at the polls, with the former dropping to four seats from seven and the latter failing to achieve enough of a voter percentage to attain any seats this year.

A centre-right coalition could nonetheless be constructed by Independence, possibly including the venerable Progressive Party (Framsóknarflokkur), IP’s ally in numerous previous governments, and the new Centre Party (Miðflokkur), which won seven seats in its first election campaign. However, since the Centre Party was created earlier this year after Progressive leader Sigmundur Davíð Gunnlaugsson left that party in the wake of the Panama Papers scandal in April 2016, there may be little love lost between the Centre and the Progressive parties, which would make political cooperation difficult. As well, the Centre Party has had little time to complete a political platform, and its stance on many domestic and foreign policy issues remains unclear. Gunnlaugsson has however called for extensive financial sector reform and policies designed to more evenly distribute wealth in the country.

However, a centre-left coalition could also be possible led by VG, especially given the remarkable political comeback made by the centre-left Social Democratic Alliance (Samfylkingin), which had been banished to the political wilderness after the 2016 vote but earned seven seats as opposed to three the previous year. As well, Left-Greens leader Katrín Jakobsdóttir has much public support, as a recent poll suggested that two-thirds of respondents favour her as prime minister. She has been compared with other members of a younger generation of leaders, including Canada’s Justin Trudeau, Emmanuel Macron in France, and Jacinda Ardern who took office this month in New Zealand.

A potential left-wing coalition could also include the Pirate Party (Píratar), which lost four seats this round, winning only six this time. The populist People’s Party, (Flokkur fólksins), which ran on a platform of increased rights for the poor, elderly and disabled as well as scepticism of Icelandic immigration policies, also won seats (four) for the first time. Any coalition government will require at least three parties and possibly as much as five to maintain coherency, and failing that, a coalition may be forced to govern in a minority position, leading to the strong possibility of yet another election sooner rather than later.

Both Ms Jakobsdóttir and current Prime Minister Bjarni Benediktsson will likely be given opportunities to form coalitions, and such meetings with the President of Iceland Guðni Th. Jóhannesson will likely commence this week. It remains to be seen how long the process will take, especially considering that two months of negotiations were required after last year’s election to form a coalition which ultimately lasted a mere nine months.

Although the Icelandic economy continues to grow, with GDP growth at over seven percent last year, led by burgeoning tourism numbers, there remains much debate about the state of social services, health care and education in the country, as well as whether the tourism boom is sustainable and whether preparations should be made for a time when income from tourism levels off. Iceland’s relationship with the European Union will also persist as a point of debate given widely differing views on that subject between the parties, as well as likely questions of relations with the United States and the state of regional security and diplomacy. But first, let the negotiations begin…