By Eva H. Önnudóttir (University of Iceland)

The 2016 election in Iceland was an early election, held about six months earlier than was originally planned. The election was brought about by the Panama scandal in April 2016. The Panama Papers revealed, among other things, the ownership of the former Prime Minister, Sigmundur Davíð Gunnlaugsson of an off-shore company named Wintris. That, and in particular the fact that the Prime Minister stormed out of an TV interview when asked about this off-shore company led to an public outrage, protests, the Prime Minister’s resignation and an early election in the fall 2016.
One might have expected that the election campaign would have been marked by a debate about off-shore companies, corruption and political scandals. That did not happen. Instead the campaign was very much about the usual issues such as health care, the economy, education, the fishing industry and agriculture. However, the campaign together with politics in Iceland in 2016 has many features which can be understood as a change of Icelandic politics as they used to be before the global credit crunch. The financial crash in Iceland 2008 triggered extensive protests in the country and since then politics have been turbulent. The Icelandic National Election Study in 2009 showed that voters’ ties and attachment to the established political parties weakened significantly in the 2009 election, and those ties did not recover in the 2013 election. This means that since the 2009 election established parties cannot count on getting their normal share of votes in elections after the crisis. Voters are much more volatile in the sense that they are more ready to switch parties and that opens up a space for new parties to gain support –exactly what has happened since then.
In the 2016 election seven parties got enough votes to enter the parliament. The two former government parties, the Independence Party got 29.0% of the vote and the Progressive Party 11.5%. Out of the opposition parties Left-Green Movement gained the most, or 15.9%, and after them the two new parties since 2013 the Pirate Party with 14.5% and the Bright Future with 7.2%. The Reform won a major victory as a new party with 10.5% of the vote. The Social Democratic Alliance barely reached the 5% national threshold with 5.7%. The loss of the Social Democrats, a party that used to be a 25-30% party, is one of the big stories of this election – possible making the ground fertile for a reshuffle of the centre-left in Icelandic politics.
The other big story of the 2016 election is the rise of the new centre-right liberal party, the Reform. The party announced that it would run in the upcoming election just a few weeks before the election – although it had been rumoured to be in the pipelines for more than a year. The main difference between the Reform and the Independence Party, with the former as a splinter party from the latter, is that the Reform campaigned on continuing Iceland’s negotiations with the EU about membership and to join the union, but the Independence Party is against it. There are other differences as well, but the issue of the EU was what drove the founders of the Reform to leave the Independence Party and to form their own party.
The results of the 2016 election, which was held on 29 October 2016 was that for a majority government coalition at least three parties were needed, and that is a change from how it has been for the last 25 years were it has always been a two party government. It took a little more than two months and a several rounds of negotiations between different parties before the Independence Party, Reform and Bright Future managed to reach an agreement and formerly took over the government on 11 January 2017. The government coalition of those three parties is a centre-right wing government, led by the Independence Party, but with a very narrow majority in the parliament with 32 MPs out of 63. The government treaty reflects that the two smaller parties, Reform and Bright Future, had to make extensive compromises, specifically when it comes to the issues of EU negotiations and fisheries. Reform was founded based on the issue of the EU and Bright Future campaigned on that a referendum should be held about whether to continue the EU negotiations or not. Neither party managed to include those policies in the government treaty. Instead, the treaty states that if a referendum will be proposed in the parliament by an MP it will be processed in the parliament. Given that the Reform was founded as a splinter party from the Independence Party based on the issue of the EU, compromising on that issue might harm their support in the future.
The new government coalition is in many ways the most obvious coalition with a minimum number of parties needed for a majority and the three parties are next to each on the left-right spectrum, from the centre to the right. The narrow majority of the government means that it might have to count on the support of the opposition in some matters. For a long time there has been a discussion about that the government and opposition should work more closely together, and the current government in Iceland might have to count on such a cooperation in order to survive. However, the initial responses of the opposition parties to the government treaty seems to point to the opposite. The opposition parties immediately attacked the new government and the government treaty for being vague, that Reform and Bright Future had compromised too much and that their only role is to keep the Independence Party in power. Furthermore the new Prime Minister, Bjarni Benediktsson, came under heavy criticism in early January for delaying to deliver a report to the parliament about Icelanders’ assets in off-shore companies until after the election and has been accused of doing so deliberately as it might have harmed the electoral support of his party. The new government and the new Prime Minister thus seem to have a rough start. Time will tell whether this government will survive for a whole term or not. It has often been so in Icelandic politics that the smaller coalition parties are punished more harshly in elections and to find out whether that will be the fate of the Reform and Bright Future we will have to wait for the next national election.

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