Iceland's Ruling Coalition Dissolves

The political situation in Iceland deteriorated further today when Prime Minister Geir Haarde announced the immediate dissolution of the Independence Party's ruling coalition with the Social Democratic Alliance (SDA). On Saturday, Haarde announced that he was suffering from malignant esophageal cancer, and called for new elections on May 9th.

After a series of formal and informal meetings over the weekend, he and SDA leader, Foreign Minister Ingibjorg Solrun Gisladottir, were unable reach and agree as to how to proceed until then. However, according to Mr. Haarde, the SDA had dissolved into three separate parties, and was no longer able to finish this term in a responsible manner.

These events represent the culmination of a week that saw thousands of demonstrators descend upon Iceland's parliament, the Althingi, in protest of the government's handling of the financial and currency crises that have hit this small island nation over the past four months. Since October 8, 2008, the country's three largest banks failed and were nationalized by the government, with debts of 7-10 times the country's gross national product. The Icelandic krona has plummeted in value, and unemployment has skyrocketed.

On Saturday, the largest protest yet was held before the Althingi, with nearly 2% of the nation's population present. Commerce Minister Bjorgvin Sigurdsson announced that we was resigning, and stated that, although he was at fault for his role in these events, many others in the government also had a hand in them, and he called for them to publicly accept responsibility. Noisy demonstrations also were held outside the Hotel Hilton Nordica, where Iceland's Central Bank was holding its annual celebration.

Mr. Haarde proposed the creation of a national government to rule until new elections could be held, with participation from the other major political parties. He emphasized the importance of maintaining a reasonable tempo to ensure that government services be provided and that commercial activities continue.

Ms. Gisladottir, who returned from Sweden this weekend after undergoing treatment for a brain tumor, said her party demanded "a government with strong leadership that the nation can trust in and a credible and reliable leader to head it. We just need to find the right person." She said she did not consider herself that individual, considering her personal situation.

Although the dissolution of the ruling coalition and call for new elections is long overdue, it is more important than ever that the government treat the Icelandic people like adults and tell us exactly what has happened to our country, and who made the decisions that resulted in this mess. Most fingers seem to point at David Oddsson, currently head of the Central Bank, and Prime Minister during the period when the deregulation of the banks took place, but, as Sigurdsson indicated, there is plenty of blame to spread around.

More than ever, the first task of the new government should be to hold hearings to investigate these matters. We have lost faith in our government, and must see where we've been before we can see where we're going.

Prime Minister Geir H. Haarde and Foreign Minister Ingibjorg Solrun Gisladottir
Photo credit: mbl.is/omar

Original news stories in Icelandic at mbl.is

Comments

[Freedom2]

Fred, don´t put the blame on America for the problems Iceland is experiencing. The world economic crisis was indeed caused by America but the Icelandic crisis was caused by Icelanders!
Perhaps you need to do a little more Googling before you start placing the blame where it doesn´t belong.
When you say "I thought their form of government was closer to a true democracy" this really shows how little you actually know about how this country has been run over the years. How dare you insinuate that the crooked bankers,politicians and businessmen in this country got their criminal leanings from America! Greed and ineptness are traits not bounded by country!

[FredBrighton]

It certainly seems that once again the "leadership" of American culture has caused many more innocent victims. I've always admired the Icelandic culture, especially as I thought their form of government was closer to a true democracy. As it turns out it seems that like the Americans, Icelanders turned over the running of things to wealthy politicians who, naturally, promptly took the money and ran. When Iceland finally gets a formula whereby ordinary citizens can go about their business and still be able to track what their government is doing I certainly hope America is paying attention. I think by now we can say for certain that all politicians are potentially crooked or incompetent. Therefor all forms of government must include active and constant oversight of their actions. We should assume that even the relatively progressive official is going to go bad over time.