A minority government (a government represented by the minority of MPs in parliament) between the Social Democratic Alliance and the Left-Green Movement, with the current Minister for Social Affairs Jóhanna Sigurdardóttir as prime minister, is considered the coalition most likely to lead Iceland until after the elections in spring.
Chairman of the Left-Greens Steingrímur J. Sigfússon speaking at parliament. Photo by Páll Kjartansson.
The chairpersons from all parties met with President of Iceland Ólafur Ragnar Grímsson at his residence at Bessastadir yesterday, after which representatives from the Social Democrats and the Left-Greens began discussing a new formation of government, Morgunbladid reports.
According to Morgunbladid, informal discussions between the two parties on a potential coalition had already been taking place for the past few days in case the Independence Party-Social Democrat coalition split up, as happened at noon yesterday.
After it became clear that the government had been dissolved, chairman of the Left-Greens Steingrímur J. Sigfússon’s first option was to form a national government, that is, a coalition including all parties in parliament.
Chairmen of other parties, Gudjón Arnar Kristjánsson of the Liberal Party and outgoing Prime Minister Geir H. Haarde of the Independence Party, also announced that they preferred a national government.
However, chairman of the Progressive Party Sigmundur Davíd Gunnlaugsson had announced already before the split that he was prepared to defend a minority government between the Social Democrats and the Left-Greens from a vote of no confidence.
Yesterday it became evident that the formation of a national government would pose problems as the former coalition parties were in disagreement as to who would lead the new government as prime minister.
Haarde said that since the Independence Party is the largest political party in Iceland (according to the results of the 2007 elections) it would be natural for them to have the prime minister’s chair while the Social Democrats want a member of their party to take the chair, Social Affairs Minister Sigurdardóttir.
In fact, this demand was the purported reason that the government split. The Social Democrats proposed to the Independence Party that Sigurdardóttir replace Haarde as prime minister and that their coalition remain intact until the spring elections, but the Independence Party was unwilling to comply with that demand.
After Left-Green chairman Sigfússon’s meeting with the president yesterday evening, he met with his fellow party members to review the situation and discuss a potential coalition with the Social Democrats.
The board of the Left-Greens then called for a party council meeting tonight, which convenes the party’s highest powers between general meetings, during which, according to Morgunbladid, an approval for a new government will be requested.
The Left-Greens have clear demands for a new government; a speedier investigation of the collapse of the banking system in which more foreign experts participate and certain measures to cleanse the administration and supervisory authorities.
These measures include that the three governors of the Central Bank step down, including chairman Davíd Oddsson, and a new order be established at the bank. They also request that Baldur Gudlaugsson, undersecretary at the Ministry of Finance, be made redundant.
Other changes the Left-Greens are keen on carrying out are that a provision on referendums be added to the constitution, the number of ministers be reduced, the controversial retirement laws for ministers and MPs be abolished and that proposed changes to the healthcare system be reviewed.
Furthermore, the party wants to discuss with the International Monetary Fund (IMF) the possibility on reviewing its policy on the policy rates for Iceland, to see whether the policy rates can decrease more rapidly than estimated.
UPDATE: According to a story posted on mbl.is just now, President of Iceland Ólafur Ragnar Grímsson has given chairwoman of the Social Democrats Ingibjörg Sólrún Gísladóttir the authority to lead negotiations with chairman of the Left-Greens Steingrímur J. Sigfússon on the formation of a minority government.
Click here to read more about the termination of the Independence Party-Social Democrat coalition government yesterday.