Iceland seeks end to austerity with centre-right coalition government

Social Democrats suffer biggest defeat of any ruling party since independence from Denmark

Progressive Party chairman Sigmundur David Gunnlaugsson (left) and Independence leader Party Bjarni Benediktsson. A coalition government formed by the two parties is the most likely outcome of Saturday’s election in Iceland, according to political science professor Olafur Hardarson. Photograph: AP Photo/Brynjar Gauti

Progressive Party chairman Sigmundur David Gunnlaugsson (left) and Independence leader Party Bjarni Benediktsson. A coalition government formed by the two parties is the most likely outcome of Saturday’s election in Iceland, according to political science professor Olafur Hardarson. Photograph: AP Photo/Brynjar Gauti

 

Iceland’s centre-right parties yesterday began talks to form a new government, promising to end years of austerity and provide debt relief to households, and only arguing about which one of them should lead the government.

Fed up with years of belt-tightening and soaring debt, Icelanders ousted the Social Democrats on Saturday, handing the biggest defeat to any ruling party since independence from Denmark in 1944 and offering a new chance to the very parties that presided over its economic rise and collapse.

“The best solution would be a two-party coalition; that would be the strongest type of government capable to handling the tough decisions ahead,” Independence Party leader Bjarni Benediktsson said yesterday, calling a coalition of the two centre-right parties a “natural first choice”.

With all the ballots counted, the Independence Party, which took part in every government between 1980 and 2009, won 26.7 per cent of the vote and 19 seats in the Althing, the world’s oldest parliamentary institution.

The Progressive Party, its main rival and partner in many previous coalitions, scored 24.4 per cent, also worth 19 seats, while the Social Democrats were a distant third with 12.9 per cent.

“Independence Party and Progressive Party teaming up in a coalition is by far the most likely outcome. Other outcomes are of course possible but very unlikely,” Olafur Hardarson, a political science professor at the University of Iceland said, when the final votes came in.

Quick deal
In a country where Nordic civility prevails, coalitions are usually formed in just days and experts said it would be a quick deal once again.

President Olafur Ragnar Grimsson said he would decide by this evening who he would ask to form the government.

Progressive Party leader Sigmundur Gunnlaugsson argued that he should lead the government because his party made the biggest gains, more than doubling its seats in parliament. “I would think we are in a position to be offered to lead the government. We have gained most support,” he said. – (Reuters)