Iceland

   
 

Executive Summary

Coalition collapse
prompts new election
After only eight months in power, the previous coalition government (formed after the 2016 elections) collapsed when Bright Future announced its departure from the coalition due to a perceived collapse in trust within the government. In October 2017, a second parliamentary election within a year took place, with the previous government losing its parliamentary majority. The Center Party (Miðflokkurinn) – the new party led by Sigmundur D. Gunnlaugsson, the former prime minister and chairman of the Progressive Party – won 11% of the vote and seven parliamentary seats. The People’s Party won 7% of the vote and four seats.
New government spans left-right spectrum
For the first time, eight parties won seats in parliament. The Left-Green Movement (11 seats), the Independence Party (16 seats) and the Progressive Party (eight seats) formed a new coalition government, with Katrín Jakobsdóttir, leader of the Left-Green Movement, as prime minister. Consequently, the current coalition government spans the left-right political spectrum.
Support for government parties falling
Two of the 11 elected Left-Green Movement members of parliament declared that they would not support a coalition that included the Independence Party. However, they have so far not caused any problems for the coalition, which holds 35 out of 63 parliamentary seats (or 33 out of 63 seats if the two dissenting Left-Green Movement parliamentarians are excluded). The coalition parties received a cumulative 53% of the vote in the 2017 election. Though, according to Gallup polling, their support fell from 74% in December 2017 to 45% a year later. The upcoming 2019 wage negotiations may prove difficult for the government.
Local elections show similar patterns
Local government elections were held in May 2018. The main patterns of support for the larger parties remained unchanged. In Reykjavík, the number of councilors was increased from 15 to 23 to make it easier for smaller parties to win a mandate. Out of a record number of 16 parties running, eight parties won seats. Low voter turnout in local government elections, 66.5% in 2014 and 67.5% in 2018, has been a concern.
Gag order bars newspaper from reporting on leaks
Two weeks before the October 2017 parliamentary elections, the Reykjavík Sheriff’s Department decided, at the request of Glitnir HoldCo, which is in the process of liquidation, to issue a gagging order on the newspaper Stundin. The order prevented the newspaper from reporting on leaked documents, which outlined dubious financial transactions involving the then prime minister and chairman of the Independence Party, Bjarni Benediktsson. The Reykjavík District Court revoked the order in February 2018. On appeal, the Country Court (Landsréttur), a court of higher instance, confirmed the lower court’s revocation of the gagging order. Even so, the damage inflicted on the newspaper was clear. The court cases stifled press freedom for over a year and may have influenced the results of the 2017 election.
Concerns despite recovery from financial crash
Other indicators suggest that economic recovery from a financial crash is not the whole story. Freedom House no longer categorizes Iceland as a full-fledged democracy. Iceland’s democracy score was 100 between 2004 and 2009, but dropped to 99 between 2010 and 2012, before returning to 100 in 2013, 2014 and 2016. In 2017 and 2018, Iceland’s democracy score dropped to 95 and the country ranked 19 overall. Iceland’s deteriorating score has been caused by several reasons – not only the treatment of immigrants, which is often the sole reason why OECD countries fail to achieve a score of 100 in Freedom House’s ranking.
Citations:
Eythórsson, G., and Kowalczyk, M. (2013), “Explaining the low voter turnout in Iceland’s 2010 local government elections,” Samtíð. An Icelandic journal of society and culture, Vol. 1.

Eythórsson, G. T., Önnudóttir, E. H., Hardarson, Ó. T., Valgardsson, V. O., Jónsdóttir, G. A., Björnsdóttir, A. E. and Birgisson, H. E. (2014), “Sveitarstjórnarkosningarnar 2014: Hverjar eru ástæður dræmrar kjörsóknar?” (What are the main reasons for the low voter turnout in the Local Government elections in 2014?).

Eythórsson, G. T., and Önnudóttir, E. H. (2017): “Abstainers’ reasoning for not voting in the Icelandic Local Government Election 2014,” Íslenska þjóðfélagið,” Vol. 8, No. 1. http://thjodfelagid.is/index.php/Th/article/view/86. Accessed 21 December 2018.

Freedom House (2018b), “Freedom in the World 2018, Iceland Profile.“ https://freedomhouse.org/report/freedom-world/2018/iceland. Accessed 21 December 2018.

Gallup. https://www.gallup.is/nidurstodur/thjodarpuls/studningur-vid-rikisstjorn/ Accessed 21 December 2018.

Gylfason, Thorvaldur (2018), “Ten Years After: Iceland’s Unfinished Business,” forthcoming in Robert Z. Aliber and Gylfi Zoega (eds.), The 2008 Global Financial Crisis in Retrospect, Palgrave. Also available as CESifo Working Paper No. 7318, November 2018.

Hardarson, Ólafur Th. (2017), “Icelandic Althingi election 2017: One more government defeat – and a party system in a continuing flux,” in Party Systems and Governments Observatory, 2 November.
https://whogoverns.eu/icelandic-althingi-election-2017-one-more-government-defeat-and-a-party-system-in-a-continuing-flux/. Accessed 21 December 2018.
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