Iceland set for coalition talks following government’s ouster

By Balazs Koranyi and Robert Robertson, Reuters

REYKJAVIK, Iceland–Iceland’s center-right parties prepared for coalition talks on Sunday after defeating the ruling Social Democrats in elections with promises of ending austerity measures five years after a financial collapse. With nearly all the ballots counted, the Independence Party took 26.7 percent of the vote and the Progressive Party 24.4 percent, both gaining 19 seats in the Althing, or parliament. The Social Democrats were a distant third with 12.9 percent.

“Independence and Progressives teaming up in a coalition is the likely outcome,” Olafur Hardarson, a political science professor at the University of Iceland said. “Other outcomes are of course possible but very unlikely.” Once a European financial center, the windswept north Atlantic island of glaciers, geysers and volcanoes has struggled along for years after a crash that brought it to its knees in just a matter of days.

The election brings back the same parties that presided over the rise and fall. Tired by years of belt tightening, high mortgages, capital controls and unrealised promises of recovery, households lost patience with the Social Democrats. “We are offering a different road, a road to growth, protecting social security, better welfare and job creation,” said Independence leader Bjarni Benediktsson, the favorite to become the next prime minister. “What we won’t compromise about is cutting taxes and lifting the living standards of people,” Benediktsson, a 43-year-old former professional soccer player, told Reuters. The Independence party won the popular vote but earned as many seats in parliament as Sigmundur Gunnlaugsson’s Progressive Party, setting the stage for a tussle between the two. “We’ve seen all sorts of different forms of governments here in the past decades,” Gunnlaugsson, 38, told Reuters. “Sometimes the biggest party delegates the prime minister, sometimes not.” Coalitions in Iceland are traditionally agreed in a matter of days. “The choice seems to be clear,” Benediktsson said. “We’ll go into coalition with whoever we can govern with.” Short Memories