Just two years after holding a parliamentary election, voters in Iceland are likely to return to the polls next May 9 for an early general election. Normally, the poll would not need to be held until 2011, but these are anything but normal times in the Nordic island nation, whose economy has been devastated by the ongoing global financial crisis.
With all of Iceland's three major banks under receivership since October; the national currency (the krona) having lost over half its value and the stock market over 90 percent of its value; inflation and unemployment on the rise; and the GDP expected to contract by ten percent this year, public discontent over the perceived mismanagement of the economy by the coalition government of Iceland's two major parties - the conservative Independence Party and the left-of-center Social Democratic Alliance - has fueled mounting protests, first on a weekly basis and more recently on a daily basis.
The protests, which have drawn crowds of up to six thousand - a respectable figure for a country with a population of just over 300,000 - had been peaceful until last week, when they suddenly turned violent. In response, Prime Minister Geir Haarde announced he would call an early election for May 9; he also indicated that he would step down due to health reasons, having been diagnosed with esophageal cancer. Prime Minister Haarde initially let it know he intended to stay in office until the early election was held, but protests continued to take place, demanding the government's immediate resignation. Minister of Business Affairs Björgvin G. Sigurðsson subsequently announced he would resign from office immediately, and Haarde's grand coalition government came apart shortly thereafter.
In many ways, the events currently taking place in Iceland are reminiscent of developments in Argentina during that country's economic meltdown in late 2001, in which increasingly intense, violent protests forced the ouster of then-president Fernando de la Rúa under the rallying cry of "¡Que se vayan todos!," or "Away with them all!" - "them" being the politicians. To be certain, voters in Argentina didn't get rid of all the incumbent elected officials, but the financial crisis of 2001-02 crushed de la Rúa's Radical Civic Union (UCR), which until then had been one of the country's major political parties, and obliterated the Radicals' allies as well. Likewise, Iceland's ruling parties may be in for a major setback in the upcoming election: opinion polls indicate that the Independence Party - which has dominated Icelandic party politics since the country severed its union with Denmark in 1944 - may lose its pre-eminent status, while support for the Alliance has fluctuated wildly, with more recent polls suggesting the party is likely to lose considerable ground as well.
The two parties that currently stand out to gain the most are the opposition Left-Green Movement - which stands to the left of the Alliance and appears set to become the largest party in the upcoming election - and the agrarian, middle-of-the road Progressive Party. The Left-Green Movement has never been in power, while the Progressives has held office frequently, most recently from 1995 to 2007 as the Independence Party's coalition partner. Meanwhile, Iceland's grass-root movements may also take part in the upcoming election, and they could find fertile ground for their agenda: according to one opinion poll, eight percent of voters would support parties other than the ones that ran in the preceding election.
At any rate, no single party is likely to gain an overall parliamentary majority under Iceland's proportional representation system (reviewed in Elections to the Icelandic Althing), and the election winner will have to find coalition partners in order to form a government. That said, it remains too early to tell what kind of government may emerge from the election, all the more so because unlike in most of the other Nordic countries, right-left coalitions such as the outgoing Independence Party-Alliance administration are a fairly common occurrence in Iceland.
Update
Iceland President Ólafur Ragnar Grímsson has asked Social Democratic Alliance leader (and outgoing Minister for Foreign Affairs) Ingibjörg Sólrún Gísladóttir to form a minority coalition government with the Left-Green Movement, which would also be supported by the Progressive Party. However, Gísladóttir, who underwent a brain tumor operation last year, is expected to appoint Minister of Social Affairs Jóhanna Sigurðardóttir as interim prime minister. If confirmed, Sigurðardóttir - who remains highly popular - would become Iceland's first ever female premier and the world's first openly gay head of government.
Originally published at the Global Economy Matters blog and reproduced here with the author’s permission.
Jóhanna Sigurðardóttir  Jóhanna Sigurðardóttir, an openly gay Icelandic politician currently serving as the nation's Minister for Social Affairs, is soon to be appointed prime minister. The appointment will mark the first time ever that an openly gay individual has been appointed head of a national government. She will remain interim prime minister until the general election, rescheduled for May.

Jóhanna, 66, has support from both parties in the new coalition government, and she says she will accept the position under the condition that both parties will trust her. On January 27, it was announced that the nation's coalition government had collapsed and dissolved following a banking financial crisis. In October of 2008, Iceland's banking sector collapsed and was largely nationalised.

"Now we need a strong government that works with the people," said Jóhanna during a press conference. She will be replacing the current prime minister, Geir Haarde who resigned on January 26, and is the chairmen of the nation's independent party and a critic of Jóhanna. He criticizes her not for her sexual orientation, but her appointment because he believes she will not help the economic crisis, resulting in more government spending.

The new minority coalition will consist of Jóhanna's Social Democratic Alliance and the Left-Green Movement with backing from the Progressive Party. Elections are expected in May 2009. The Social Democratic Alliance was also in the previous coalition with Geir's Independence Party.

"Jóhanna is a very good woman — but she likes public spending, she is a tax raiser," said Geir.

A 2008 poll conducted in December, found that 73% of 2,000 people surveyed supported Jóhanna, which would make her the country's most popular prime minister in their government's history. Iceland's deputy chief of mission at the Icelandic embassy in Washington, D.C. located in the United States, Olafur Sigurdsson, says that her homosexuality was never a problem with most other government officials.

"If she is gay, that is not an issue at all. We are very liberal in that sense. It has never been an issue for her as a politician," said Olafur.

Before entering the world of politics, Jóhanna worked for Loftleidir Airlines as a flight attendant for about 10 years, before she got elected to parliament in 1978. From 1987 to 1994 and then from 2007 until the present day, she has served as the country's Minister for Social Affairs.