Much of the world’s attention is focused on the ever-closer US election, which is only a matter of weeks away. However, there is a closer election that could also potentially have a revolutionary impact, at least for its roughly 350,000 citizens. Iceland goes to the polls in two weeks time, and the Pirate Party (which formed only four years ago) could well become the largest party and lead coalition talks.
So why is Iceland having an election now, and why are the Pirates possibly only a few weeks away from becoming the largest party?
This is the first blog in a series looking at the elections in Iceland, including a breakdown of what each of the main parties stand for, and what the potential impact of the result might mean for the island state.
ICELAND’S HISTORY
99% of Icelanders live in urban areas, with 60% in the country’s capital Reykjavik. 93% of Iceland’s residents are Icelandic with only 7% born abroad. Iceland’s biggest minority group is the Polish community, which make up 3% of the population. Despite such low numbers of foreign-born residents, it is expected that this number will double by 2030 due a shortage in labour.
Religion still plays a key part in Icelandic life, with the Icelandic tax system (as of December last year) imposing a £53 tax on citizens for the state funding of religion. More than 70% of Icelanders affiliated with the Lutheran ‘Church of Iceland’, which is higher than most of its Scandinavian neighbours. Although the vast majority Iceland citizens are Christian, other faiths are also practised, including paganism, which 2% of the country follow. Just over 5% of the country formally have no religion.
Until the 20th century, Iceland was one of the poorest regions in Europe, relying on fishing and agriculture, but Marshall Plan investment during the Cold War revitalised the Icelandic economy. Today, Iceland is one of the world’s most developed nations and one of the richest per capita. Although not a member of the European Union, Iceland is part of the European Free Trade Association (EFTA), the European Economic Area (EEA) and the Schengen Area.
Iceland’s economy, was hit hard by the financial crash of 2008, which saw three of the country’s largest banks collapse, causing the Icelandic stock market plummet and sovereign debt interest rates soar. The crash also triggered the collapse of the government at the time, led by the right-wing Independence Party, who lost power for the first time in 18 years and lost a third of its support.
The government also reignited debates about joining the European Union, after the Icelandic parliament, the Althing, voted in favour of starting accession talks in 2009. It had been speculated that Iceland may be fast-tracked into the Union to save its economy, which could have included the country entering the eurozone. However, these stalled over disputes with other EU members over debt repayments.
This, combined with failed attempts at constitutional reform, resulted in the government was voted out of office in 2013. The Independence Party tied with the populist Progressive Party and both entered into a coalition. With both parties being eurosceptic, the new government closed accession talks with the EU.
Although opinion polls suggest that Iceland would vote to stay out of the EU, the decision to close talks was unpopular, with a majority wanting to complete the application process.
PANAMA PAPERS
Normally, Iceland holds parliamentary elections every four years, meaning that an election would have been called in April 2017 at the latest. However, revelations in the Panama Papers released in April this year sparked a wave of animosity towards the government, with protesters calling for early elections.
Leaks from the law firm Mossack Fonseca discovered that the then Prime Minister and Progressive Party leader Sigmundur Davíð Gunnlaugsson did not declare his 50% stake in a company that controlled bonds from one of the bankrupt banks. A new law would have made this illegal, but the day before it went into effect, he sold his share to his wife (who also owned the other half of the firm).
As the PM negotiated with creditors of Iceland’s banks, there was outrage at this conflict of interest, with almost 10% of the population protesting outside the parliament building, demanding his resignation and calling for fresh elections.
Sigmundur Davíð Gunnlaugsson announced a temporary leave of absence from his duties, with Fisheries and Agriculture minister Sigurður Ingi Jóhannsson taking on the role. However, in August Independence Party leader Bjarni Benediktsson met with opposition parties and called for elections in October, effectively excluding Sigmundur Davíð from his post as Prime Minister and as Progressive Party leader.
RISE OF THE PIRATES
During the Independence-Progressive government, the Pirate Party has continually gained momentum in national polling. Although only forming in 2012 and winning only three seats in the Althing in the 2013 election, the Pirates surpassed the Independence Party in national polls in April 2015. At the peak of the Panama Papers scandal, the Pirates were polling at 43%, with talk of a possible majority government if elections had been called then.
Polling currently shows the party polling significantly lower, but still within a few percentage points ahead or behind the Independence Party.
INDEPENDENCE PARTY SPLIT AND ‘REVIVAL’
Part of the reason behind the Pirates decline in the polls since April is the creation of a new party, which split from the Independence Party in May. Viðreisn (‘Revival’ in English) split from the ruling party due to discontent from a decision not to hold a referendum on EU membership and the Independence’s lack of support for free trade.
Revival is currently polling at 11.4% nationally, meaning it is certain it will win seats in the elections, and could end up having the balance of power.
Tomorrow’s blog will look in-depth at the ruling Independence Party, including their history as being (almost) always the largest party in Icelandic politics and what their manifesto says for this year’s election.
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