Iceland Elections: The Revolution Is In (The House)

For a party that has no money and has existed as a political force for less than two months, the outcome of the Icelandic election is nothing less than miraculous: Four of the Icelandic parliament's 63 seats went to the Citizens' Movement, created following January's uprising - the Pot and Pan Revolution - that resulted in the fall of Iceland's conservative government.

"It is great that we who stood out in the cold banging outside the doors and windows of Alþingi, now we're in," the party's brand new MP Þór Saari said. "The 'not-nation' ('ekki-þjóðin,' referring to a former minister who famously, or perhaps infamously, told protesters, "you are not the nation!") and the 'mob' are now members of Parliament, and we won't be leaving anytime soon." As of this writing, 85% of the vote had been counted, and Saari said they were holding out hope for a fifth seat.

The voters of Iceland decisively repudiated the 18-year rule of the conservative Independence Party, and affirmed the interim alliance of the Social Democrat and Left-Green parties that has ruled Iceland since the fall of the government earlier this year.

"This shift to the left means that the public has drawn its conclusions from the financial collapse and is turning away from radical libertarianism towards more Scandinavian political and social values," observed Stefán Ólafsson, sociology professor at the University of Iceland and director of the university's Social Science Research Institute. "For Iceland this is a new experience and means that Iceland can for the first time be ruled in the same way as the Scandinavian neighbors, by a social democratic majority."

The preliminary results indicate that the Social Democrats received 30.8% of the vote (which translated to 20 seats in the Althingi--Iceland's parliament), and the Left-Greens 21.7% (14 seats), giving them a clear majority in the 63-seat Althing. The previously-dominant Independence Party garnered only 23.6% (15 seats, a net loss of 9 seats). The Progressive Party had a surprisingly strong showing with 14.6% (10 seats). The Citizens' Movement, running on a platform of a thorough clean-up of Iceland's corrupt backroom politics and constitutional reform, received 7.2% (4 seats) in its first election.

Disappointment, suspense: Prime Minister and leader of Social-Democratic Party Jóhanna Sigurðardóttir (L) and Left Green Party Education Minister Katrín Jakobsdóttir follow the election results in Reykjavík . Photo credit: (AFP/Olivier Morin)

The popularity of the Social Democrats is due in large part to its leader, Jóhanna Sigurðardóttir, Iceland's first female Prime Minister, and the world's first openly gay leader. Jóhanna, nicknamed St. Jóhanna by many Icelanders, has emerged as the sole experienced politician untouched by the corruption and incompetence that led to Iceland's catastrophic economic collapse.

While leading the interim government over the past three months, Jóhanna has brought in renowned international corruption fighter Eva Joly investigate the causes of the collapse of Iceland's banks, ousted former Independence Party prime minister Davíð Oddsson from his position as head of Iceland's Central Bank and replaced him with Norwegian banking official Svein Harald Øygard, and worked with the International Monetary Fund (IMF) to stabilize the economy.

The challenges facing Iceland are profound. The IMF has only slowed, but not reversed, the rate of collapse. Unemployment has soared from under 2% to well over 8%. Inflation continues to rage in the 15-20% range. The currency controls imposed by the IMF due to the collapse of the Icelandic krona have essentially prevented Icelandic businesses from doing business abroad, and there is talk of major companies relocating their headquarters to America and Europe.

The partially completed shells of apartment buildings litter the landscape, and riot police were called in last week to remove squatters from abandoned downtown properties. Three companies go bankrupt every day.

Foreign workers who had come to Iceland during the good times have left, and many native Icelanders have dispersed to Europe and Canada in search of jobs. The country's unemployment compensation fund is expected to be depleted by November. The upcoming graduations will flood the job market with hundreds more applicants. Sigmundur Davíð Gunnlaugsson, leader of the Progressive Party, has recently alluded to a secret report from an outside accounting firm predicting a second collapse based on its assessment of the nationalized banks.

The first order of business for the new government will be to get the banks refinanced and thereby start to tackle the ailing businesses and the mounting unemployment position, according to Professor Ólafsson. "The government will probably have to implement an extra crisis budget in the summer, cutting public expenditures and raising some taxes, due to an excessive public deficit."

The ongoing investigation of the banks, which is widely expected to implicate many politicians, will also take much of the Alþingi's time, with a parliamentary report expected by the end of the year. There are reports of thousands of secret bank accounts in Tortola and elsewhere containing funds looted from the banks in the days immediately preceding their collapse. Any prosecutions or attempts to claw back those funds will surely prove to be contentious.

The Social Democrats view expedited membership in the European Union as the solution for these problems. A stable currency, they argue, is a necessary component of any recovery.

Necessary, perhaps, but not sufficient, argue the Left-Green and Independence Parties. EU membership has not saved Ireland, Spain, or Hungary from severe recession, and would almost certainly require concession of Iceland's most valuable resource--its fisheries.

Iceland has been through tough times before, but it has never had to deal with great financial success until now. We failed miserably in our attempt to build a temple to materialism and now must steel ourselves for the long, hard process of rebuilding our society. These elections are just the first step in what will surely prove to be a long and lonely journey back from the edge of ruination.

But at least we're finally moving back up.

Comments

[faust2001]

I look forward to returning to Iceland in 2011 for the 5th anniversary of my first Icelandic sojourn. I look forward to witnessing the fruits of your recovery.

[Islendingur]

A few things annoy me about this article and the comments. Mostly though the reference to the "18-year rule of the conservative Independence Party" and the implication that that party alone is to blame for the economic collapse. Admittedly, the Independence Party was the most powerful party most of that time. But, it never had majority status. Every government during the last eighteen years has been a coalition government. Most of the time the country was governed by a coalition of the Independence Party and the Progressive Party. But for the last couple of years, when some of the biggest mistakes were made, they were in coalition with the Social Democrats, who have now somehow magically been able to distance themselves completely from the economic collapse. How quickly it is forgotten that the cabinet minister in charge of banking and financial services during the time leading up to the collapse was Bjorgvin Sigurdsson, of the Social Democratic Party.

Also, the suggestion that Iceland can finally be ruled by a social democratic majority is absurd. Iceland has always been a social democratic country, with free universal health care, free education, relatively generous unemployment benefits, subsidized daycares, and so on.

[Iris Erlingsdottir - Huffpost Blogger]

There is plenty of blame to go around and the ongoing investigation will hopefully bring to light the worst offenders. I agree that the Social Democrats have not cleaned house as they should, but to try to blame the bank collapse on Mr. Sigurdsson doesn’t add up. What happened in Iceland is the result of policies spelled out and implemented by the Independence Party over a much longer period than the sixteen months or so that passed between Mr. Sigurdsson taking the post of commerce minister and the bank collapse.

Yes, Iceland has had these benefits mentioned, but "free" they are not. Icelanders pay much higher fees for doctor visits, medicines, day care and other social services than Scandinavians, and privatizing (or privatefriendizing, as it is called in Iceland, for the IP doling out big contracts and “benefits” of privatization to its friends and family members) the health care system has been high on the list of priorities for the IP. Its policies brought to Iceland an appalling inequality and class division, and fortunately voters have rejected its ideology. No, I am not against rich people or making money... all that private enterprise stuff. But that was not what happened in Iceland. There, a small group of people played hard and fast with money they didn’t own and left others to pick up the bill.

[Islendingur]

I wouldn't pin the blame on Mr. Sigurdsson, ... not exclusively. I would include Oddsson, Darling, Brown, Haarde, Jonas Fridrik Jonsson, cheerleader Olafur Ragnar Grimsson, as well as a number of bankers and businessmen (some of whom have much closer ties to the Social Democrats than to the Independence Party), not to mention the bulk of the Icelandic population, who were simply not amenable to being told that they needed to rein in the good times and play safe. What I do take an issue with is the portrayal of the Evil Ruling Independence Party finally being ousted by the pure and innocent Social Democrats. As I pointed out, the Social Democrats were in government for a while before the collapse, and they held the cabinet post responsible for the financial industry. They had all the information and a big share of the power, and yet I don't recall them sounding the alarm or fighting hard for tighter banking regulations.

As for the comparison between Iceland and the other Scandinavian countries; yes, there is a difference of degree, with respect to at least some of these social and welfare programs. But, even so, Iceland has for many decades been essentially a social democratic state and it remained so during the last eighteen years.

[zaz33]

When Americans vote for the candidate that takes the most "campaign contributions" they perpetuate our special interest driven government.

It's obvious that the people of Iceland are wiser than we are.

[seanparnell]

Nonsense. People vote for the people they like (however foolish or wise that may be), and the "special interests" are Americans benefiting from the policies that candidates said they'd pursue in office. Some candidates, that's going to be labor, some business, some farmers, etc. We're all "special interests."

Sean Parnell
President
Center for Competitive Politics
http://www.campaignfreedom.org
campaignfreedom.orgeedom.org

[Mum]

Congratulations. I knew that the land of the Althing, Bjork, Halldor Laxness, Snorri Sturluson, and Sigur Ros would come back to what makes it great.

[Hopeington]

Now that's what I call change. Power to the people. I was beginning to get worried for Iceland. Seems like they're moving forward. Good news and a great post, thanks Iris.

[RofWH]

Stay away from the EU and especially the euro. As every good Scandinavian knows, the euro is the means by which France and Germany subsidize their agriculture to the detriment of the rest of the euro zone. And you know that your fisheries will be plundered by Portugese and other EU fishing fleets.

[JaneaneTheAcerbicGoblin]

[We failed miserably in our attempt to build a temple to materialism]

So did America.

[AnotherMcIntosh]

Good for you. Congratulations.

We wish all the best for you and yours.

[rodsbadhairday]

Good luck, Iceland. I have had the opportunity to visit your
country twice. It has stunning landscapes, breathtaking waterfalls,
clean geothermal power and good strong people. And lots of ponies!

You'll recover, and recover your senses, and be better off for it.

[philistine]

This is very good news for Iceland. Congratulations - and keep fighting. The scoundrels in Iceland, like those in the United States, have quite a war chest after reaping the rewards of their underhandedness for so long.

[FredBrighton]

The Icelanders were the first to arrive in America. They paved the way for settlements. Now they can show America how to pull out of the morass of corruption and incompetence that has brought their country to it's knees. We in America will never be honest enough to admit our wrongs but in secret we may copy the means by which Iceland restores itself. Oh we'll give the credit to some American billionaire, but it will be the Althing that gives us the answers. Yay Iceland! Iris, thanks for the wonderful posts! I'm planting irises in the garden in your name.

[AnotherMcIntosh]

Saint Brendan was from Iceland?