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New government in Iceland

New government in Iceland

| Text: Guðrún Helga Sigurðardóttir, Photo: Foto: Forsætisráðuneytið

Iceland has a new government. It has announced a stop to EU membership negotiations to allow time to decide whether negotiations will continue at all. It is still unclear when a referendum on EU membership will take place.

The Progressive Party (Framsóknarflokkurinn) and the centre-right Independence Party (Sjálfstæðisflokkurinn) have formed a coalition government in Iceland. The Progressive Party leader Sigmundur Davíð Gunnlaugsson is Iceland’s new Prime Minister. 

The country has broken off EU membership negotiations. The government will evaluate the negotiations which have taken place so far as well as recent developments within the EU. The evaluation will be presented to parliament and the Icelandic people. Negotiations will continue only if the Icelandic people back a membership application in a referendum.

Prime Minister Sigmundur Davíð Gunnlaugsson says the opposition to the EU is not surprising to anyone who is familiar with Icelandic politics. He says opposition has increased lately within both the coalition parties. 

“The parties have agreed to hold a referendum on the EU membership negotiations within the next four years,” says Prime Minister Sigmundur Davíð Gunnlaugsson.

“We have yet to decided the exact date,” he says.

The new government promises to improve the economic situation for Iceland’s families. Mortgages are index-linked and interests rose sharply with inflation between 2007 and 2010. As a result living standards fell for many families. The government now wants to address that problem, mainly by reducing the amount people are allowed to borrow and by lowering income and business taxes. 

The government is also promising to use the opportunities created by the closure of the proof of claim proceedings after the bankruptcy of Iceland’s private banks, to improve the economy of families. The Króna remains Iceland’s currency. 

Iceland’s government uses Norway as a model. Iceland is establishing a state owned oil company to extract any oil or gas found within Iceland’s borders. Prime Minister Sigmundur Davíð Gunnlaugsson says they are following the Norwegian model.

“We would like to learn from Norway,” says Sigmundur Davíð Gunnlaugsson. 

Iceland will also establish an information centre for fisheries according to a Norwegian model, to promote fisheries and fish as a food source. Iceland’s new fishing tax will be revised. 

The government wants Iceland to play a leading role in the North Atlantic region, and lead the western Nordic cooperation.

Iceland’s government

Iceland’s new Prime Minister Sigmundur Davíð Gunnlaugsson has been an MP since 2009. For the past four years he has also been leader of the Progressive Party (Framsóknarflokkurinns).

He is born in 1975 and is married with one child. He has a degree in economics and political science. 

The leader of the Independence Party, Bjarni Benediktsson, is Iceland’s new Minister of Finance. A trained lawyer, he has been an MP since 2003. He has been leader of the Independence Party since 2009. 

Bjarni Benediktsson is married with four children.

The two parties have a history of forming coalitions, usually under the leadership of the Independence Party.

The parliamentary elections

Iceland’s parliamentary elections were held on 27 April 2013. It resulted in a windfall for the Progressive Party (Framsóknarflokkurinn), which doubled its number of parliamentary seats. This gave the party the same number of seats as the centre-right Independence Party (Sjálfstæðisflokkurinn), and together they secured 38 seats.

There are 63 MPs in total. Since the 2008 crash, many MPs have been replaced.  Nearly a third, 19 out of 63, are now serving their first term as MPs.   

There are fewer female MPs than before, just under 40 percent of the total. Just three of the ten new government ministers are women.

A full 15 political parties took part in this year’s election, an unusually large number for Iceland. Six parties are now represented in parliament. The outgoing government parties, the Social Democratic Alliance and the Left-Green Movement, were the election’s big losers.


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