From Iceland — The Regressive Party

The Regressive Party

Published June 16, 2006

The Regressive Party

Halldór Ásgrímsson is a relatively rare breed of career politician. Having had a seat in parliament since 1974, he is currently the country’s longest serving MP and an institution within the Progressive Party. He became vice chairman of the party in 1980, a position he served until he took over as chairman in 1994. His recent stint as prime minister, and previously as foreign minister, saw him tackle a series of controversial issues from heavy industry to Iceland’s involvement in the Iraq war. In each case his party was up against a considerable tide of public opinion, ultimately resulting in an abysmal showing in the recent mayoral elections. As a result of the Progressive Party’s ailing fortunes, Ásgrímsson has announced his resignation and retirement from politics – his life’s work.

While rumours of his imminent departure had been circulating since the disastrous elections in May, the Prime Minister’s major announcement came somewhat suddenly and dramatically on the evening of June fifth. He was quitting politics, resigning from his posts as party chairman of the Progressive Party and Prime Minister of Iceland, and his second in command, Guðni Ágústsson, had agreed to resign as well. Except… no, not really.

While Ásgrímsson’s departure from the position of prime minister seems imminent as we are going to print, and Geir H. Haarde of the Independence Party is clearly itching to take over, the former PM is going to stay on as party chairman until a replacement has been chosen, which is probably not going to happen until the third week of August. According to some reports he even plans to sit as a regular MP for the rest of his term. Within the hour, Ágústsson, who was actually standing red-faced just a few metres behind Ásgrímsson when the announcement was made, issued his own statement denying that he had decided to leave. This sparked immediate talk of him challenging for the top spot in the party. The morning after, Progressive Minister for Industry and Commerce Valgerður Sverrisdóttir cited “various” but curiously unspecified reasons for not trusting Ágústsson to take the reins of power, resulting in a bitter argument that seemed to mainly take place through the news media. Even more bad publicity may have been narrowly averted, as it was also widely speculated that Finnur Ingólfsson, a former MP and Minister for the Progressive Party, was planning a comeback from big business to challenge for the leadership. He wisely put those rumours to rest, however, after prominent opposition figures started privately reminiscing about what kind of dealings he had been engaged in for the past couple of years (more on that later).

Aside from the issue of who will lead them, there seems to be much horse-trading and arguing going on over the number and nature of cabinet seats that will be available to the Progressives after they give up the prime ministership to Geir Haarde and the Independence Party.

Apparently, they want their ministers to occupy half of the dozen available cabinet seats in exchange for giving up the top spot, despite the fact that they have virtually no electoral support to justify that demand. It’s a testament to how desperate the Independence Party is for malleable allies, then, that they are sticking by this desperately ailing entity even as it threatens to tear itself apart in a search for some kind of credibility on the national stage.

To be sure, the fact that Finnur Ingólfsson appears to have been excluded from participating in the upcoming leadership contest is going to allow people in both governing parties to breathe a lot easier. While he has never been implicated in any criminal wrongdoing, serious questions regarding his integrity were raised in opposition circles following his sudden departure from the post of finance minister in 1999, his equally sudden move from the Central Bank to insurance behemoth VÍS in 2002, and his subsequent involvement in the latter’s acquisition of the then newly privatised Búnaðarbankinn. Critics pointed to the fact that the former heir apparent to Halldór Ásgrímsson was in effect given an absurd head start in negotiating with his old friends in the Progressive Party for the multi-billion krónur deal that eventually saw his firm take over a major bank and significantly strengthen its position. Was he headhunted for the express purpose of sealing the deal with a wink and a handshake, when others would have had to go through formal channels and actually, you know, make a fair bid? Far be it from us to speculate, but these theories are out there and both the Independence and Progressive parties know full well that bringing these dirty old matters out of the hamper for a more thorough examination is not in their interest. Finnur probably never had a choice – even if he had wanted to give up his fabulous salary and benefits to take on the thankless job of presiding over what increasingly looks like a party going through a severe identity crisis. He didn’t so much burn that bridge as he had it dismantled and sold for a tidy profit.

Back to the present, or at least the current situation as of us going to print. Guðni Ágústsson, who has numerous supporters around the Icelandic countryside, seems to have been more than a little taken aback at being nearly dragged out of politics along with Halldór Ásgrímsson. Days of meetings between the two, tinged by obvious discontent on the part of Ágústsson, were apparently brought to a close with a blatantly choreographed media event in which they shook hands and pledged to work together to bring stability to the party. Guðni Ágústsson will not be resigning, at least not yet, but it’s still unclear what the full implications of this apparent compromise will be. Össur Skarphéðinsson, MP for the Social Democrats, told the Grapevine that Ágústsson almost certainly had his eyes on the chairmanship: “Guðni is holding all the cards right now. It is essentially up to him who becomes chairman of the Progressive Party, and frankly the only other plausible candidate I can think of is Siv Friðleifsdóttir. Her only chance would be to ally herself with the departing Ásgrímsson and his assistant, Björn Ingi Hrafnsson. But I really don’t see her wanting to face the terrible backlash the Progressives will doubtlessly receive in the next parliamentary elections, so she is probably happy to bide her time and let Ágústsson take over for now,” said Skarp-héðinsson.

While he has influential supporters, Guðni Ágústsson is widely seen as part of the old guard that was almost exclusively concerned with agriculture and the countryside, and has no mass appeal beyond lifelong supporters. Lifelong supporters of the Progressive Party are obviously dwindling in number; no party can survive for long without fresh blood. There have been attempts to revamp the party’s image, most notably in the recent mayoral elections when young people carrying the banner of ExBé were seen driving around in what turned out to be a rather ill-fated Hummer H2 (someone parked it in a handicapped spot and the picture was all over the Internet and news media, in case you missed it). It’s just that those efforts didn’t achieve anything, the only reason Progressive Björn Ingi Hrafnsson is now in the Reykjavík City Council is the relatively strong showing by the Independence Party, and their subsequent decision to extend the government coalition into city politics. The Progressive Party is thus going to have to make a rather difficult decision: go back to the heartland and try to recapture the hearts and minds of the dwindling electoral pool of peasantry, or get serious about moving forward. Image makeovers aren’t enough. Unless they are willing to turn to the likes of Ágústsson, the Progressives are going to have to gain some credibility by giving up some of their most outrageous unpopular policies, possibly their seats in government and definitely the Hummer. Please, God, get rid of the Hummer.

The Grapevine tried to reach Guðni Ágústsson for comment. Our calls have not been returned.

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