Leftists win Iceland vote as crisis sinks conservatives

27th April 2009, Comments 0 comments

The conservative Independence Party, in power for 18 years until it resigned in January amid massive protests over the financial crisis that brought Iceland to the brink of bankruptcy, posted its worst-ever election result.

Reykjavik -- Iceland's left-wing government won a snap general election as voters punished the conservatives they blame for the country's economic meltdown seven months ago, final results showed Sunday.

The conservative Independence Party, in power for 18 years until it resigned in January amid massive protests over the financial crisis that brought Iceland to the brink of bankruptcy, posted its worst-ever election result.

"We lost this time but we will win again later," party leader Bjarni Benediktsson said, conceding defeat having garnered just 23.7 percent of votes and 16 seats in the 63-seat parliament, or Althingi, a worst showing that its previous low of 27 percent in 1987.

Prime Minister Johanna Sigurdardottir of the pro-EU Social Democratic Party campaigned heavily on leading Iceland into the European Union and will now have to try to reach an agreement with her eurosceptic coalition partner, the Left Green Movement.

The Social Democrats won 20 seats with 29.8 percent of the vote, while the Left Greens claimed 14 seats with 21.7 percent, giving the coalition an absolute majority of 34 seats, a first for a left-wing government.

"Our time has come," Sigurdardottir, a 66-year-old openly gay feminist, told cheering supporters.

The Independence Party was in power in the early 1990s when the financial markets were deregulated, and has been held accountable for the current crisis which has seen thousands of people lose their jobs and their savings.

Iceland's was the first government to fall as a result of the global financial crisis, sending protesters into the streets banging pots and pans for months in what was dubbed the Kitchen Revolution.

Benediktsson said he got the voters' message.

"It has been clear that we have lost trust and we are just beginning to gain that back," he said.

The North Atlantic island nation was one of the most prosperous countries in the world until the global financial crisis struck late last year, bringing down its oversized financial sector as devastation ensued.

The state had to take control of the country's three major banks in October, as the local currency, the Icelandic krona, lost 44 percent of its value.

Unemployment, which was virtually non-existent before the crisis, is expected to hit 10 percent by the end of this year as the economy shrinks by 10 percent, and inflation is currently hovering around 15 percent.

The country received a 2.1-billion-dollar (1.58-billion-euro) bailout from the International Monetary Fund in November, and some early signs of a recovery have been observed.

Sigurdardottir is a fierce advocate of joining the European Union quickly and adopting the euro, arguing that doing so would shelter the country of 320,000 people from global turbulence.

"If we apply immediately for EU membership we will be able to adopt the euro within four years," she said, adding that Iceland "already meets 70 to 75 percent of EU criteria."

She said the election results were "a clear message that people want us to start thinking about the EU."

Yet her coalition partners, the Left Greens, are opposed to joining the bloc.

They have nonetheless insisted on the need for a debate on the issue which deeply divides Iceland amid fears that Brussels would interfere with its large fishing industry.

The fishing sector -- accounting for 36.6 percent of exports in 2008, second only to the aluminium industry -- is seen as crucial to Iceland's economic recovery.

Despite their opposing EU views, the Social Democrats and Left Greens have vowed to continue their coalition, though they have yet to explain how they plan to overcome their differences.

"There are good chances that we can agree on a process which is acceptable to a divided nation on this big issue," Left Green leader Steingrimur Sigfusson said on the eve of the vote.

Meanwhile, a party formed at the height of the economic collapse and which has pushed for democratic reforms, the Civil Movement, made its way into parliament, garnering 7.2 percent of votes.

Voter participation was said to be high, with the daily Morgunbladid reporting turnout of 85.1 percent, compared to 83.6 percent in 2007.

AFP/Expatica

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