Published April 27, 2009

The elections are over, and the result pretty much the entire world expected came to be. But what will this really mean for Iceland’s future?

As we, at the Grapevine staff, watched and liveblogged the results as they came in, political pundits tried their best to have something, anything to say by injecting their own creative theories of what could play out. Perhaps the most surreal theory put forward was that the Social Democrats, being the largest party in the country, had the power to form three possible governments – with the Leftist-Greens, with the conservative Independence Party, or with the Progressives. This theory was laughable at best. The conservatives were off the table – re-forming the partnership that brought thousands upon thousands of Icelanders to protest in front of parliament for months on end would be political suicide. And a partnership with the Progressives is just unfeasible, seeing as how they only have nine seats; not enough for a majority (presumably, at the point of the early morning hours when this theory was put forth, the pundit was seeing much greater support for the Progressives than anyone was projecting). The only conceivable way a Social Dem/Progressive government could work would be with the support of the Citizen’s Movement, forming a three-party minority government. Talks between the Social Dems and Leftist-Greens, ongoing at the time of this writing, would have to go very sour for this to happen.
And then of course there’s the whole EU question. Social Dems were quick to seize upon their decisive victory as proof positive that Icelanders want to join the EU. Even the Prime Minster touched upon this in her victory speech. The Social Dems would do well to remember that Icelanders are not single-issue voters, though – for example, one poll showed 25% of those who said they voted conservative in 2007 intending to vote Leftist-Green this time around. Icelanders tend to be flexible with their reasons for voting the way they do. It is, in other words, conceivable that a large number of the people who voted for the Social Dems last Saturday did so for reasons other than the EU. Certainly a large number of those who voted for the Social Dems are pro-EU, but the a poll from last February on the question shows over half of the nation against applying for membership (UPDATE, May 7: The latest Gallup poll shows 61.2% of respondants either very supportive or rather supportive of entering membership talks with the EU – Paul). At the same time, most Icelanders do favor a national referendum on the subject, as do the Leftist-Greens. It would be hard to imagine the Social Dems being against a referendum, especially seeing as how the question would need to be answered at street level anyway. This being the case, even if the conservatives told the Social Dems they were ready to apply for EU membership tomorrow, they really have nothing to offer that would make a coalition with them instead of the Leftist-Greens more appealing.
The greatest task before the new government will be the economy, first and foremost. The conservatives are not going to make life easy for the new government – they’d been in power since, well, forever. It would be a historical anomaly for a party in power so long, utterly spanked in the general elections and now in the opposition, to sit quietly in the gallery and nod their heads at every proposal the leftist government passes along. They want this government to fail, badly.
The Progressives, believing that a modest rise in support is proof that their image as a dying and obsolete party has been put to rest, will also be trying their best to paint themselves as the true defenders of the Icelandic household. Recent tensions between their party and the Social Dems are likely to escalate, now that they’re no longer needed. Expect the volume knob on the populist amplifier to go to 11.

The Citizen’s Movement, having made an impressive showing for as young as they are, will most probably vote with the leftist government most of the time. Their spokesmen have said as much, and many in their party had and still have close relationships with both the Social Dems and the Leftist-Greens.
The reality is, the leftist government won’t even need to fail spectacularly to lose power. They will need to provide fast and significant improvements to the Icelandic economy and get things stabilized within the next four years. This summer will in all likelihood be the first proving grounds – summer is peak tourist season, and Icelanders are counting on foreigners taking advantage of a weakened crown to boost the economy. If that doesn’t happen, the government is going to find itself having to answer for it, fair or not. And with municipal elections next spring, that demand is stronger than ever.
The Social Dems and Leftist-Greens are both well aware of this. This is why the Social Dems have been pushing for the EU question to be addressed as soon as possible. They see the adoption of the euro and joining the EU as essential to stabilizing and improving Iceland’s economy. The Leftist-Greens, whose platform contends that Iceland would be best served outside of the EU, will have to convince the public that their plans can yield real economic results if they want a referendum to go their way. Their emphasis on sustainability and self-sufficiency appeals to the strong independent streak in the national character, as well as to the average Icelander’s environmental sensibilities. If they can show real results with their proposals, they could very well convince the nation that staying apart from the EU is the way to go. As it is, the Social-Dems are going to have to do some convincing of their own: most Icelanders are skeptical of the EU’s benefits, especially with regards to sovereignty over their fishing waters (which has served as the backbone of the Icelandic economy for decades) and the possibility of growing unemployment.

In many ways, Iceland’s new government is in the same position America’s White House finds itself in now – they’ve got a long way to go and a short time to get there. Fortunately, the leftist government has a wider margin of support over the conservatives than America’s Democrats can claim over Republicans. But it’s a fragile margin which is largely dependent on how things play out over the next 12 months.