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What Iceland’s election results really mean

If you’re reading this, you probably know that we had elections here in Iceland yesterday.*

The last time I posted, we were pretty sure that the Progressive Party was going to bag these elections, as they were leading quite substantially in the polls. In the end, however, the Independence Party – the main culprit in Iceland’s economic meltdown five years ago – came out on top with the greatest number of votes, or 26.7%.

Who, me smug?

The smug brigade

I won’t waste time posting the actual figures, or analyzing why the former government was punished so severely at the polls, or dissecting the psyche of a nation that has the memory of a goldfish – rather I’ll focus on some of the implications of the current situation.

First of all, a coalition between these two parties [that left scorched earth in their wake the last time they were in power] is not yet a certainty. It’s likely, but not 100% sure. The ball is with the president, who issues a mandate for a party leader of his choosing to form a government. [He plans to meet with party leaders tomorrow.] Under regular circumstances, that would be the party that got the greatest number of votes. But we don’t have a regular president – Ólafur Ragnar Grímsson is really a autocrat politician in figurehead’s clothing, so what he decides to do in this situation is anybody’s guess.

But as I said, a coalition between these two parties is likely. So, what will that mean in terms of some of the major issues that have been on the agenda over the last four years – including those issues that got the previous government voted into office in the first place [and on which they failed to deliver, for the most part]?

The new constitution. No doubt many of you will remember all the hoopla around the “crowdsourced constitution” that got tons of attention all over the world. The point of that new constitution was for us Icelanders to actually have a chance to write our own, not just continue to use the one handed down to us by Denmark when we became an independent republic. Also, to try to prevent, insofar as possible, the creation of the sort of conditions that led us to the brink of ruin in 2008. Well. We are still waiting for that constitution. One reason is because the opposition [now the ruling majority] used filibustering to prevent it from going through. Granted, there was a lot of conflict between different camps on various issues, and maybe it would have been a mistake to push it through without trying to find at least some sort of concession on those things – but the main concern now is that the new government will just scrap it altogether. After all, it serves their interests and those of their supporters [read: the elite] to have the constitution stay the same.

The Office of the Special Prosecutor. You may remember that a Special Prosecutor’s office was set up in the wake of the collapse to investigate corruption and the financial crimes that led to the collapse. The Independence Party has always been opposed to the SP – unsurprisingly, since they and their cronies are associated with most of the corruption that has surfaced. The fear now is that the new government will severely cut funding for the SPO, and/or dismantle it altogether. After all, the IP, under the leadership of Davíð Oddsson, dismantled the National Economic Institute back in 2002 because it was publishing unwelcome reports about the state of the economy, so it’s not like there isn’t a precedent.

The fisheries management system. Better known as the “quota system”. I wrote about it here. In brief: a handful of people were handed fishing quotas that made them extremely wealthy. They pay very little back to society for that privilege, even though the fish in the sea is a common resource belonging to us all. The previous government promised to dismantle the system and implement a new one – something they failed to do [though they made some changes]. The quota owners have fought to keep those quotas tooth and nail. They back the IP, who basically serve their interests. A more fair system seems very unlikely while the IP is in power. The rich get richer, etc.

Heavy industry. We now have three aluminium smelters in Iceland belonging to multinational corporations. They get power at a fraction of the rate that regular citizens of this country have to pay. That includes greenhouse farmers, who nevertheless are trying hard to maintain some level of sustainability in this country. The vast majority of the wealth generated by smelters is exported abroad, of course. And heavy industry wreaks havoc on our nature. The previous government, with the Left-Greens in the Environment Ministry, did a very good job of protecting many areas that were pegged for power harnessing. Now that the IP/PP are back, all that looks likely to change. Indeed, Century Aluminum, which is just jonesing to start up a new smelter on the Reykjanes peninsula, said last week that they are putting a lot of hope in the new government. Incidentally, the power for that smelter doesn’t exist, which means boreholes all over Reykjanes as they try to harness steam to power it. And it would not surprise me if the new government tried to kick-start the economy by attracting yet another smelter. You know, because it worked so well the last time.

European Union. Potential accession negotiations have been underway with the EU for the last few years. Irrespective of what people think of the EU, the majority of Icelanders want to finish what we started, and to see what an agreement would look like. [And before any readers go ballistic at the very mention of the idea: NO the EU would not ruin Iceland’s fishing grounds as their vessels would not fish here. It would be reserved for Icelandic vessels due to a caveat that only vessels that have had access to the fishing zones for the last 20 years receive quotas there. That means Icelandic vessels only.] The agreement would then be voted on in a national referendum. That way, the nation would have the final say – as it should in a democratic country. The IP is vehemently opposed to the EU, mostly because the quota owners say so. The PP is also fiercely opposed. Both have said they will hold a referendum on whether or not to continue the negotiations. However, both parties have refused to set a date or even a time frame for that. So, you know, we may get a say in that at some point – if they ever get around to it.

The currency. The krona is dead. We need a new currency. However, neither party is prepared to address this issue or formulate any sort of realistic policy or vision in these matters. So in the meantime we’re stuck with capital controls, in an economic environment that no investor will touch with a ten-foot pole, and in which neither businesses nor households in Iceland can operate in the long term. But hey, that doesn’t seem to be of major concern to the IP/PP folks.

So that’s a basic rundown. Of course there is much else I could write about, like the two new parties that have at least got a handful of new MPs [the Pirate Movement and Bright Future] and who offer a glimmer of hope. But as you can probably tell, this election outcome is far from reassuring to those of us who remember what actually happened here in the years before the meltdown. Our only hope is that maybe, just maybe, a bit more awareness and vigilance has been created among the general population. As someone said today on a talk show, “Austurvöllur [where the riots took place in 2009] is not far away”. And those pots and pans are still in our kitchens.

* Unless you are reading this 50 years down the road, in which case: we had elections here in Iceland yesterday. 

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[Photo filched from RÚV]