As the year draws to a close, Iceland Review brings you a summary of the biggest stories in community, culture, and nature in 2023. Here are some of the political, economic, and social interest stories that most affected Icelandic communities this year.
This year started out tense for the labour movement, with Efling Union and the Confederation of Icelandic Enterprise (SA) in a wage negotiation deadlock. One-third of all labour contracts in Iceland had expired in the fall of 2022, and while most trade unions were able to reach compromises with SA in the form of shorter-term contracts, Efling Union, the country’s second-largest, held out.
In February, Efling workers voted to strike, leading to the temporary closure of several hotels and shortages of fuel at the pumps. At the height of strike actions in late February, some 2,000 Efling members were on strike. SA responded by proposing a lockout against Efling workers, which was approved in a members’ vote on February 22. Such a lockout would affect all members of Efling, around 21,000 in total, neither allowing them to show up to work, receive a wage, or accrue benefits and leave.
On March 1, the lockout was later postponed after temporarily-appointed state mediator Ástráður Haraldsson submitted a mediating proposal to SA and Efling. Efling members then voted in favour of the proposals, bringing months of tension to an end. The approved agreement is only valid until January 2024, however, and negotiations for the next one have not gotten off to a good start.
Read more about the Efling and SA collective agreement negotiations.
Iceland is regularly ranked as one of the most peaceful places in the world. However, in May 2023, residents of the capital were greeted by rather unusual sights. Police officers armed with submachine guns prowled the streets, helicopters hovered overhead, and surveillance cameras kept their silent watch over downtown. These security measures were due to the Council of Europe Summit in Reykjavík, but not all of them were destined to pack up and leave alongside the private jets of world leaders. It was reported that Icelandic police would keep the additional weapons imported for the summit.
Unfortunately, 2022 proved to be a particularly violent year for Iceland, with a high-profile knife attack in a downtown Reykjavík club, a thwarted domestic terrorism plot, and four homicides (higher than the annual average of two, but not as many as in 2000, when Iceland reported a record six murders). In the wake of this violent year, Justice Minister Jón Gunnarsson declared a “war on organised crime,” the keystone of which is a sweeping package of reforms that includes provisions for increased police funding, pre-emptive search warrants, and better-armed police. For Iceland, a nation where police officers still do not carry firearms on their person, the changes are novel.
They have also not been introduced without pushback. The Icelandic Bar Association submitted many comments on the Justice Minister’s bill that would increase Icelandic police’s powers to monitor people whoa re not suspected of crimes. Later that same month, the Parliamentary Ombudsman published a legal opinion stating that Jón Gunnarsson was guilty of a lack of consultation with the cabinet when he signed an amendment to regulations, authorising Icelandic police to carry electroshock weapons. This issue in particular triggered a failed vote of no confidence in Parliament.
Read more about police powers in Iceland.
Regulations on asylum seekers
In the spring of 2023, after several failed attempts and harsh criticism from human rights groups, Iceland’s Parliament passed new legislation that tightens restrictions on asylum seekers. The most significant change is that people whose asylum applications have received a final rejection are now stripped of essential services unless they consent to deportation. As a result, dozens of asylum seekers unable to leave the country for reasons personal or political are being stripped of housing and services, leaving many of them on the streets.
When the legislation took effect, municipal and state authorities could not agree on who was responsible for providing for the group’s basic needs. Now it appears that municipalities will provide basic services to the group, but the state will ultimately foot the bill, in a system more costly to taxpayers than the one it has replaced. Iceland’s Justice Minister Guðrún Hafsteinsdóttir has proposed erecting detention centres for asylum seekers and stated she will introduce a bill to that effect in early 2024.
Icelandic authorities have been criticised for the deportation of many asylum seekers this year as well, and how such deportations have been handled. The country deported 180 Venezuelans back to their home country in November, where they received a cold welcome. A disabled asylum seeker left Iceland with his family this month after a ruling that his family members would be deported.
Read more about the eviction of asylum seekers from state-subsidised housing in Iceland.
Bjarni Benediktsson resigns
On October 10, 2023, Finance Minister Bjarni Benediktsson called a snap press conference. The call came on the heels of an opinion authored by the Parliamentary Ombudsman that concluded that the Minister of Finance’s role in the ongoing privatisation of Íslandsbanki bank – which had been nationalised following the 2008 banking collapse – had not conformed to state guidelines.
The official opinion of the Ombudsman stated: “In light of the fact that a company owned by the Finance Minister’s father was among the buyers in the sale of the state’s 22.5% share of the Íslandsbanki bank, sold in March 2022, the Minister was unfit to approve of a proposal made by Icelandic State Financial Investments (ISFI) to go ahead with the sale.”
At the press conference, Bjarni announced his decision to step down as Minister of Finance, despite his “own views, reasons, and understanding” of the Ombudsman’s opinion. Only six ministers have ever resigned from office following criticism or protest since the Republic of Iceland was established in 1944. However, the historic act was somewhat tempered when it was later announced that Bjarni would “switch seats” with Þórdís Kolbrún Reykfjörð Gylfadóttir to become Minister for Foreign Affairs while Þórdís took the position of Finance Minister. Þórdís has announced that she will move forward with selling the remainder of Íslandsbanki.
Read more about Bjarni Benediktsson.
As elsewhere in the world, 2023 has been marked by persistent inflation and a significant increase in the cost of living in Iceland. In an attempt to curb inflation, the Central Bank of Iceland continued raising interest rates throughout the first three quarters, to a height of 9.25% for the key interest rate. In October and November, however, it decided to keep that rate unchanged, citing economic uncertainty.
In June, Iceland’s government introduced measures to counter inflation, involving a combination of spending cuts and tax increases. The measures have yet to show a significant impact, as inflation remains high. In November, it had measured 8% over the past 12 months and risen by 0.1% in the previous month.
Food prices have risen amid inflation, with the price of perishable good rising 12.2% year over year, significantly above inflation. When the króna appreciated mid-year, the Minister of Culture and Business Affairs sought clarification from major grocery chains on why prices had not fallen. Iceland ranks third globally when terms of food prices, trailing only Norway and Switzerland.
The rising interest rates have significantly impacted the housing market and put many families in a tight spot.
Women’s strike draws huge crowds
On October 24, 2023, women and non-binary people in Iceland held a strike in support of gender equality that drew historic crowds. Inspired by the original 1975 “Women’s Day Off,” the aim of the protest was twofold: to call for the eradication of gender-based violence and rectifying the undervaluation of female-dominated professions.
Public gatherings were held across the country, and in Reykjavík the turnout exceeded expectations. Chief Superintendent of Reykjavík Metropolitan Police Ásgeir Þór Ásgeirsson estimated that between 70,000-100,000 people attended the event on Arnarhóll hill in the city centre.
While Women’s Strikes have been held in Iceland from time to time over the last several decades, this event was only the second full-day strike of its kind, the first one being the original historic protest in 1975. This year, even Icelandic Prime Minister Katrín Jakobsdóttir walked off the job and attended the protest. The news about the Women’s Strike in Iceland spread fast around the globe, with international media outlets reporting on the event, including the New York Times, BBC, and the Guardian.
Read more about the 2023 Women’s Strike.