Iceland Political Crisis: The Latest Skip to content

Iceland Political Crisis: The Latest

At the end of an unprecedented week in Icelandic politics, things are a little quieter today as the ‘new’ government takes control—but the situation is hardly less volatile, and a large swathe of society is angrier than ever.

After reports circled the globe that Prime Minister Sigmundur Davíð Gunnlaugsson had resigned over his implication in the Panama Papers scandal, he was quick to clarify that he was not resigning at all—rather he was “stepping aside” from the role of PM, but will remain party leader and an MP.

That set the tone for a week in which a new government was sworn in, which looks almost exactly the same as the old one, and in which protesters have been promised new parliamentary elections—albeit not until an undisclosed time this autumn, assuming important government matters are completed first. Many believe the promise of elections to be an empty one and daily protests are continuing outside parliament at 17.00 each afternoon.

The new government of Sigurður Ingi Jóhannsson is in parliament today for the first time since it was officially appointed by President Ólafur Ragnar Grímsson yesterday. This morning’s agenda has been for government ministers to set out their plans and discuss the government’s strategy and ongoing projects. This afternoon’s session is focused on the opposition’s no confidence bill in the government, calling for parliament to be dissolved and new elections called. The debate is expected to last around four hours and will be followed by a vote.

As the Progressive and Independence parties hold a good majority in the Alþingi parliament since the election in 2013, it is almost certain that the opposition will lose the vote and the government will stay in power.

There have been some voices of dissent from within the governing parties, however. Progressive Party MPs Höskuldur Þórhallsson and Vigdís Hauksdóttir both having openly stated that Sigmundur Davíð Gunnlaugsson should have resigned outright and new elections should have been called right away. Independence Party MP Unnur Brá Konráðsdóttir saying that her party leader, finance minister Bjarni Benediktsson, and Minister of the Interior Ólöf Nordal should also have resigned with the PM for their part in the Panama Papers scandal. It is not known how many other coalition MPs secretly agree, but it is not considered likely that they will vote in favor of the opposition’s no confidence bill.

In his opening speech as the new (and old) Minister of Finance, Bjarni Benediktsson said that elections at this time would have been dangerous, right in the middle of the process to remove capital controls on the króna, and could have endangered the whole process. Much better, he says, to wait until the autumn.

In a strikingly similar crisis response speech to British Prime Minister Harold Macmillan’s infamous 1957 lecture to his people that “you’ve never had it so good,” Bjarni told parliament this morning that “times have never looked as bright as right now.”

“Household debts have been steadily decreasing. […] they have decreased faster in Iceland under this government than elsewhere. The employment situation has been on the bright side and inflation has been low,” the finance minister explained.

The ‘new’ government starts its time in office with the news that a Maskina opinion poll puts its popularity at roughly one-quarter. Meanwhile 54-55 percent of respondents trust the new government “very little” and a further ten percent trust it “quite little”.

Poll respondents who claim to have been paying close attention to political news in the last week were less likely to support the government than those who admitted to having paid little attention to the news.

The new PM’s approval rating in the Maskína poll is around 20 percent, and the finance minister enjoys 26 percent support.

The Icelandic political establishment has been in turmoil since it was revealed on Sunday April 3 that three government ministers were implicated in the global Panama Papers scandal, relating to offshore businesses. The Icelandic PM decided to step aside from his role, though to remain an MP and the leader of his party. The other two implicated ministers remain and there is palpable public anger and calls from some for new elections right away.

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