Iceland faces politically tumultuous times after the conservative ruling party emerged weakened in a snap vote, with new parties entering parliament in the nation’s third election in four years.
The Independence Party will win about 25.3 percent of the vote, down from 29 percent last year, a count of about 45 percent of the vote showed. Its closest challenger, the Left Green Movement, rose to 16.8 percent. Former Prime Minister David Sigmundur Gunnlaugsson, forced out last year after his name was found in the Panama Papers, emerged as one of the big winners, getting 10.3 percent with his newly formed Center Party.
With a strong economy at his back, Prime Minister Bjarni Benediktsson rallied during the campaign after he was forced to call a snap election as his three-party center-right coalition collapsed amid a controversy involving the granting of clemency to a convicted child molester.
The country now faces an “unprecedented” situation and the new political reality will require everyone to be “broad minded,” Benediktsson said in a televised party leader debate on state-broadcaster RUV.
The 47-year-old premier faces a tricky situation with 8 parties in parliament and no sure path to forming a majority government. His traditional ally, the Progressive Party, slid to 10.9 percent of the vote while his coalition partner, Revival, lost almost half its support and his other partner, Bright Future, was voted out of parliament.
The other big winner was the Social Democratic Alliance, which more than double to its backing about 12.6 percent. After last year emerging as a political force, the Pirate Party faded to 8.8 percent. The People’s Party, a disability and elderly rights party, will make it into parliament for the first time, winning 7.5 percent.
The country now likely faces protracted talks on forming a government. Last year’s election was followed by almost two months of talks before a viable coalition could be formed.
The election comes at a crucial juncture for the Icelandic economy, which is showing signs of a slowdown after its long recovery from the financial crisis. Much of the debate has centered on the need to rebuild the country’s infrastructure and on how to avoid another round of financial instability.
Benediktsson, who earlier this year oversaw the exit from capital controls in place since 2008, has pledged to use surpluses to cut taxes, rebuild infrastructure and spend more on health care. The country has also been able to reduce state debt with revenue raised from deals with the creditors of the banks that failed in 2008.
The Independence Party has been the biggest group in all but one of the elections held since Iceland split from Denmark in 1944. Benediktsson, 47, has proved a resilient politician. His name also surfaced in the Panama Papers and this month The Guardian newspaper and Icelandic media reported that he had sold “several million krona” in assets in a Glitnir Bank fund ahead of the collapse in 2008, citing leaked documents. He has denied any wrong doing.
“The main thing for me there is that nothing has come forth that shows misconduct on my behalf,” Benediktsson said after voting Saturday. “These matters have been looked into a number of times. People are simply trying to find a weak spot on me but today we are voting and the prospect is quite good for me and the party.”
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