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Viewing cable 09REYKJAVIK81, ICELAND: SOCIAL DEMS IN DRIVER'S SEAT AFTER ELECTION
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09REYKJAVIK81 | 2009-04-27 11:11 | 2011-01-13 05:05 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Reykjavik |
VZCZCXRO9690
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHRK #0081/01 1171117
ZNR UUUUU ZZH
O 271117Z APR 09
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4059
INFO RHEHNSC/NSC WASHINGTON DC IMMEDIATE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEAIIA/CIA WASHDC
UNCLAS SECTION 01 OF 02 REYKJAVIK 000081
SIPDIS
SENSITIVE
STATE FOR EUR DAS GARBER, EUR/NB
NSC FOR HOVENIER
E.O. 12958: N/A
TAGS: PGOV PREL IC
SUBJECT: ICELAND: SOCIAL DEMS IN DRIVER'S SEAT AFTER ELECTION
VICTORY
¶1. (SBU) Summary: Icelandic Prime Minister Johanna
Sigurdardottir's Social Democratic Alliance (SDA) came away with a
clear victory in parliamentary elections on April 25, winning nearly
30 percent of the vote. The SDA now holds a commanding position in
coalition talks, as their Left-Green (LG) partners in the current
minority government suffered a last-minute fade and slipped to third
behind the conservative Independence Party. A surprisingly strong
performance by two other pro-EU parties means the SDA could abandon
the LG in favor of an "EU Government," and Sigurdardottir is plainly
using this fact as leverage in negotiations with the Euro-skeptic
Left-Greens. Although the SDA and LG will probably stay together to
create Iceland's first leftist majority government, the LG will
likely be forced to move towards Brussels. Though the LG may demand
some concessions in exchange, these are likely to be on domestic
welfare and economic issues rather than foreign affairs, which are
problematic given the LG's anti-NATO platform. Aware that time is
on their side, the SDA will probably drag out the announcement of a
new government to ratchet up the pressure on their would-be
partners. End Summary.
¶2. (U) As anticipated, Iceland's Social Democratic Alliance (SDA)
came away from national parliamentary elections on April 25 with the
largest share of the vote. In its best performance since its
founding a decade ago, Prime Minister Johanna Sigurdardottir's party
won just shy of 30 percent of the vote and will hold 20 seats in the
63-member Althingi. Sigurdardottir proclaimed the results a clear
signal that the public trusts the SDA to pull Iceland out of its
economic difficulties, while also claiming that the SDA's desire to
apply for EU membership played a key role. The SDA focused its
message almost entirely on the EU question in the final three days
of the campaign, arguing that the simple act of applying for
membership would bring needed credibility to Iceland's economic
recovery efforts.
¶3. (U) Saturday's results were an unwelcome surprise for Finance,
Agriculture and Fisheries Minister Steingrimur Sigfusson's
Left-Green Movement (LG), which lost nearly six percent from the
final pre-election opinion polls. Although the LG's 22 percent
share of the vote increases their Althingi delegation from nine
seats to 14, the party had clearly hoped for more and struggled to
spin the results as a victory rather than a disappointment.
Commentators were quick to remind that the LG has historically
suffered from last-minute electoral collapses, and pointed to
several ill-advised statements by Left-Green ministers in the waning
days of the campaign. Party Chair Sigfusson reportedly said at an
event on April 23 that leading airline Icelandair might have to be
nationalized, then quickly backtracked via a Ministry of Finance
press release, while Minister of Environment Kolbrun Halldorsdottir
criticized oil exploration efforts in the Dreka Region off Iceland's
northeast coast and said the country should explore wind power
instead. Taken together, the statements may have raised doubts in
voters' minds about the LG's long-term abilities to rebuild
Iceland's economy. The party's downturn was particularly hard on
MinEnv Halldorsdottir, who was not reelected to parliament.
¶4. (U) Combined with the Left-Green collapse, three other parties
defied expectations. The conservative Independence Party, though
clearly suffering voters' wrath over the economic collapse and
government breakdown in January, did slightly better than
anticipated and only fell to second place behind the SDA. The
Progressive Party (PP), which struggled for much of the spring to
find a compelling campaign narrative, nonetheless managed to gain
three percentage points over the final pre-election polls and adding
two MPs. Combined with the surprising run of the new Citizens'
Movement, which took four Althingi seats in its maiden campaign
effort, the Progressives' success may actually reflect a growing
preference for EU membership more than anything else. Both the PP
and Citizens' Movement have endorsed EU accession as a solution to
Iceland's economic woes, and as such may have benefitted from the
SDA's focus on the issue and the LG's push-back from Brussels.
¶5. (U) Final election results were as follows, with comparison to
the 2007 elections:
SDA = Social Democratic Alliance
IP = Independence Party
LG = Left-Green Movement
PP = Progressive Party
CM = Citizens' Movement
LP = Liberal Party
MD = Movement for Democracy
Party Percent MPs Change
(MPs)
REYKJAVIK 00000081 002 OF 002
SDA 29.8 20 +2
IP 23.7 16 -9
LG 21.7 14 +5
PP 14.8 9 +2
CM 7.2 4 --
LP 2.2 0 -4
MD 0.6 0 --
Note: The Althingi (parliament) has 63 members.
¶6. (SBU) Party chairs began staking out their negotiating positions
immediately, with SDA Chair Sigurdardottir announcing simultaneously
that she would be happy to see the SDA-LG government continue, but
also that a majority had voted for pro-EU parties and that the new
government needed to reflect this. The LG instead chose to spin the
results as a nationwide move to the left and an endorsement of the
current government's economic policies, with LG Chair Sigfusson
going so far as to say on a Sunday night roundtable that only
Iceland's "elite" wants EU membership. Progressive Chair Sigmundur
David Gunnlaugsson, meanwhile, tried to avoid sounding desperate as
he enthusiastically backed Sigurdardottir's suggestion that an
SDA-PP-CM majority could coalesce around the objective of an EU
membership bid.
¶7. (SBU) Coalition talks began on the afternoon of April 26, with
PM Sigurdardottir and LG Chair Sigfusson meeting at Sigurdardottir's
residence for informal discussions. Sigurdardottir said after the
talks that they had covered the policies of the parties in general,
including their positions on EU membership. At the televised
post-elections roundtable later that night, both Sigurdardottir and
Sigfusson admitted that the EU membership question was the most
difficult issue that the SDA and the LG had to solve in their
coalition negotiations. The SDA and LG parliamentary groups will
meet today where the party leaders will seek a mandate from their
respective parties to continue the coalition talks. From a
technical perspective, PM Sigurdardottir still holds the mandate to
lead the government. As such, the SDA and the LG do not have to
meet with the President of Iceland to renew their mandate, but
Sigurdardottir will do so out of courtesy on the afternoon of April
¶27.
¶8. (SBU) Comment: Looking ahead, the SDA will use the electoral
results as leverage to force the LG to come around on the EU
question. SDA parliamentarians have underscored the importance of
applying for EU membership and are not keen on budging from that
stance. Additionally, there is now a parliamentary majority for EU
membership given that the SDA, the PP, the Citizens' Movement, and
even a portion of IP MPs are willing to start accession negotiations
with the EU. This puts the LG in a very difficult negotiating
position.
¶9. (SBU) Comment, cont'd: Given the Left-Greens' evident desire to
be part of Iceland's first leftist majority government, they will be
under great pressure to yield to SDA demands on the EU question. In
exchange, they may demand some face-saving concessions, most likely
on economic, welfare, or environmental issues. This could mean a
more difficult landscape for would-be investors in heavy industry,
e.g. aluminum. However, there are few indications that the
Left-Greens will press on core foreign policy issues, such as their
desire for Iceland's withdrawal from NATO. LG insiders have noted
to post that the party's foreign policy is lacking in depth, and
that a push on foreign policy priorities would likely reveal splits
between pacifist and neutralist elements within the LG. In any
event, time is on the SDA's side, and we anticipate that
Sigurdardottir may draw out coalition talks as a way of increasing
public pressure on the LG to give on the EU membership issue.
VAN VOORST