Iceland set for haggle after elections fail to yield absolute majority

Iceland's Prime Minister Sigurdur Ingi Johannsson (R) casts his ballot next to his wife Ingibjoerg Elsa Ingjaldsdottir in a polling station in Fludir, Iceland, during the snap general election, on Oct 29, 2016.
Iceland's Prime Minister Sigurdur Ingi Johannsson (R) casts his ballot next to his wife Ingibjoerg Elsa Ingjaldsdottir in a polling station in Fludir, Iceland, during the snap general election, on Oct 29, 2016.PHOTO: AFP

REYKJAVIK  (AFP) – Iceland on Sunday (Oct 30) faced a wrangle over its next government after the anti-establishment Pirate Party and its allies gained ground but fell short of a majority in snap elections sparked by the Panama Papers scandal.

Prime Minister Sigurdur Ingi Johannsson told the national broadcaster RUV he would resign on Sunday after his Progressive Party suffered a plunge in support.

Polls had predicted the “Pirates” would benefit from a public urge to punish establishment parties after Johannsson’s predecessor, Sigmundur David Gunnlaugsson, stepped down over allegations about family holdings stashed in tax havens.

In the end, the Pirates and three left-of-centre allies gained 28 seats, four short of the 32 needed to command an overall majority in the 63-member parliament, the Althingi, according to preliminary results announced late Saturday.

“We are very satisfied,” said “Pirates” cofounder Birgitta Jonsdottir, an activist, poet and WikiLeaks supporter.

“We are a platform for young people, for progressive people who shape and reshape our society ... like Robin Hood because Robin Hood was a pirate, we want to take the power from the powerful to give it to the people,” Jonsdottir told AFP, referring to the English outlaw of legend.

Founded just four years ago, the Pirates were credited with as many as nine seats, making them the third largest party in the island nation.

Its allies are the Left-Green movement, which picked up 10 seats, the Social Democrats, with four, and the centrist Bright Future, with five, according to the preliminary results.

The Pirate Party, whose headquarters is onboard a boat anchored in the port of Reykjavik, see themselves as a force to reinvigorate democracy.

They have set down a five-point programme that includes constitutional change to make leaders more accountable, free health care, greater protection of natural resources and the closure of tax loopholes for large corporations.

They also want Icelanders to hold a referendum on EU membership – a long-standing political issue whose objective they oppose but wish to be settled.

Among other groups, the centre-right Progressive Party picked up seven seats while the Independence Party had 21 seats.

The centre Regeneration Party, which could be the kingmakers in the election, garnered seven seats in the Icelandic parliament.

The leader of the Independence Party, Finance Minister Bjarni Benediktsson, will be given the mandate to negotiate on the majority in the parliament.

The negotiations would be very tense between the Regeneration Party and the Independence Party, from which it split over disagreement to hold a referendum on joining the EU.

“We have not been negative towards other parties or how governments should be formed,” leader of the Regeneration Party, Benedikt Johannesson said.

Implicated in the Panama Papers scandals, Benediktsson denies having wanted to escape taxes by creating a company in the Seychelles, saying he has never invested a dime.

The election was triggered after the Panama Papers revealed that 600 Icelanders including cabinet ministers, bankers and business leaders had holdings stashed away in offshore accounts.

Iceland, a volcanic island with a population of 332,000, has returned to prosperity since its 2008 financial meltdown.

Gross domestic product (GDP) growth is expected to be above four percent this year thanks to tourism revenues and a recovering financial system.

The crisis eight years ago saw Iceland’s three biggest banks and its oversized financial sector collapse, while the country was forced to seek a bailout from the International Monetary Fund.

A string of bankers were jailed, the failed banks were temporarily nationalised and then sold, and foreign investors had to accept write-downs on their debt holdings.

Olafur Hardarson, professor of political science at the University of Iceland, attributed the Pirates’ rise in popularity to voters’ anger at the 2008 crisis.

“They have managed to focus on the anti-politics and anti-establishment feelings of a lot of voters (who) have been frustrated in Iceland since the bank crash,” Hardarson told AFP.