Iceland – Left election victory but no left policies

Election Day in Iceland. In a bar in Reykjavik pictures of bankers who fled the financial crisis hang not on the wall but over the urinals in the toilets. On an expensive SUV-car, a symbol of the ‘good times’, parked outside of the office of the neo-liberal Independence party, someone has written ‘Game over’ over ‘Land Rover’. How true this is for the former government party which suffered its worst ever election result taking just 23.7 %.

By Mattias Bernhardsson and Skuli Jon Kristinsson, Reykjavik, Iceland

(This article is also published on

The coalition parties in the interim government, the Social Democratic Alliance and the Left-Green Movement, which took control after the ‘January revolt’ which brought down the old government, achieved a majority in parliament, gaining 34 MPs out of 63, and will remain in government. A so-called “left victory” was quickly declared in the media, but no-one celebrated in the streets. While people most are glad to get rid of the neo-liberal Independence Party, all the established parties are regarded with a certain measure of suspicion.

Will the unpopular right wing policies be exchanged for genuine pro-worker policies? How will the “left government” tackle the financial crisis and save the jobs?

The skeletons of partially completed buildings have become a common sight in the urban landscape, and riot police were called in last week to remove squatters from abandoned downtown properties. Three companies go bankrupt every day.


The official unemployment rate, which was non-existent before the crisis, is expected to hit 10 % by the end of this year, as the economy shrinks further also by 10%. Iceland’s unemployment compensation fund is expected to be empty by November. The upcoming student graduations will flood the job market with hundreds more applicants.

One of the first tasks of the new government will be to get the banks re-financed. They will probably have to implement an extra crisis budget during summer, cutting public expenditure and raising taxes, due to the huge public deficit. None of the elected parties have taken a clear stand against further attacks on workers and the public sector.

The euro

The most debated issue of the election was about the euro and the EU. Chair of the Left Green party, Steingrimur Sigfusson, reassured the media after the election that the differing views on EU and euro membership would be solved within the new government. In other words, the earlier EU resistance will have to give way in order for the Left Green to be able to get a seat in the sun.

All indications suggest that there is a clear parliamentary majority for immediate application. The Progressive Party has declared that Iceland should apply for membership, as well. The party has nine members in Althingi, adding two in the election. And more of the politicians from the Independence party are shifting position as the issue is discussed amongst the big business tightly connected to the party.

Already before any central negotiations have been made, some Left-Greens have also shifted, including Reykjavík City councillor Svandís Svavarsdóttir and economist Lilja Mósesdóttir.

A new group in Althingi, the Civic Movement, also wants to apply for membership. They have four new members in parliament. The party come out of the January people’s movement and their policies can be summed up as a naive wish to “go back” to smaller enterprises and “direct democracy”, rather than any kind of policies for workers, unemployed and youth. In contrast, Sósíalískt Réttlæti (CWI in Iceland) clearly take a stand against the euro and EU-membership.

EU membership has not saved Spain, Ireland or Hungary from severe recession, and would almost certainly require the concession of Iceland’s most valuable resource – the fishing industry. The fishing sector – accounting for 36.6 % of exports in 2008, second only to the aluminium industry – is a crucial natural asset, as is the unique green energy supply (geothermal).


Any government that wishes to stop wage cuts, fight against poverty, further employment, not have to raise taxes nor became a slave under the IMF, would have to nationalize such crucial assets and other big business, expropriate the wealth of the rich (1% rich own 20% of all wealth in Iceland), cancel all foreign dept (caused by parasitic speculation) and put the banks and the production under workers’ control.

When the new government is proven to be puppets blind to the capitalist system, as much as ousted thieves, a greater number of workers and youth will search for a genuine workers’ alternative. Sósíalískt Réttlæti raises the need for a new active workers’ party, with representatives who live on a workers salary themselves.


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