In These New Times

A new paradigm for a post-imperial world

At last, Iceland’s coalition collapses

Posted by seumasach on January 27, 2009

Alda Sigmundsdottir


26th January, 2009

Shortly after 1pm today, Iceland’s prime minister, Geir Haarde, announced to reporters that the coalition between the conservative Independence party and the Social Democratic Alliance (SDA) had collapsed.

The Icelandic nation had been waiting for an announcement with bated breath since last night, when the leaders of the two parties declared that today would determine the future of the government, which has been under fire since reconvening last week after its Christmas recess.

The announcement comes hot on the heels of a series of dramatic events. Last Friday the prime minister announced that the public’s increasingly violent demands for elections would be met this spring. This was a remarkable turnaround from his earlier position, as a mere few days earlier he had stated that he had no intention of calling elections. At the same press conference on Friday he announced that he had been diagnosed with a malignant tumour of the oesophagus.

Two days later – yesterday – the minister of business affairs, Björgvin Sigurðsson, called a press conference and announced his resignation, the first Icelandic politician to publicly shoulder responsibility for this country’s economic meltdown. He moreover announced that his final task in office had been to dismiss the director and board of the financial supervisory authority (FSA). Much public anger has been directed at the FSA in recent weeks, for having demonstrated startling incompetence by, among other things, failing to regulate the growth of the Icelandic banks.

The leaders of the two coalition parties – who incidentally are both suffering from cancer – met yesterday for the first time in two weeks, as the leader of the SDA had just returned from hospital treatment in Sweden. Days earlier, last Wednesday, the Reykjavik faction of the SDA agreed in the absence of the party leader that the coalition should be terminated. After yesterday’s meeting both leaders delivered vague comments to the press, saying only that the future of the government would be determined the following day (ie today).

According to the prime minister, the coalition is being terminated because the Independence party cannot agree to the SDA’s demands to take over leadership of the government. The Independence party, which has traditionally enjoyed the support of a large share of the Icelandic electorate, has seen its popularity plummet since Iceland’s banks collapsed in October. The SDA has also lost major support in recent weeks. According to Ingibjörg Sólrún Gísladóttir, the minister for foreign affairs and leader of the SDA, she had proposed that the minister of social affairs and social security, Jóhanna Sigurðardóttir – who is the most popular cabinet minister at present, according to polls – should lead the government until the elections this spring, the date of which has yet to be determined. The SDA has moreover been insistent that the directors and board of the central bank should be discharged immediately, something to which the Independence party has been unbelievably reluctant to agree.

All seem to agree that the only viable option now is to form a national government involving all of Iceland’s five political parties. It is clear that Sigurðardóttir is a strong favourite to lead that new government.

According to Haarde, what he feared the most has now come to pass: a political crisis has come on top of the country’s economic crisis and that Iceland’s credibility will suffer. It is unlikely that the jubilant crowds dancing and banging drums outside the parliament buildings in Reykjavik will be of the same opinion, as most of us feel that nothing BUT a change of this sort can possibly restore Iceland’s credibility to the outside world.

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