Friday

29th Mar 2024

Iceland's centre-left to form new government

  • Reykjavik - Iceland has been facing serious economic troubles in the last months (Photo: Johannes Jansson/norden.org)

Iceland's president Olafur Ragnar Grimsson has asked the country's Social Democrat party to set up a new government, following the collapse of the previous conservative-led coalition on Monday (26 January).

The new government - which ends an almost 20-year period of rightwing rule in Iceland - is also likely to involve the Left Green Party, newswires report.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It will lead the country until early elections expected to take place in May.

Ingibjorg Gisladottir, the Social Democrat party leader and outgoing foreign minister, has expressed hopes coalition talks could be completed before the weekend.

For his part, Steingrimmur Sigfusson, leader of the Left Green Party, said: "We have been given this job, and we'll do our best in a difficult situation."

Iceland has been facing serious economic troubles since it was hit by the global crisis in October.

The collapse of the country's financial system led to a currency crunch, ever rising unemployment and eventually to daily protests that made the government step down.

"It's safe to say that no government in the history of Iceland has had to deal with as many and as complex problems as the one that is now leaving office," President Grimsson said after the fall of former premier Geir Haarde's government.

One of the first moves of the Social Democrats is expected to be the replacement of the current central bank governor blamed by many for Iceland's economic troubles.

"In discussions and deliberations with leaders of the parties which will form the new government in a few days, it is absolutely clear that one of the pillars of the new programme will be a change in the leadership of the central bank," Mr Grimsson told the BBC.

Meanwhile, figures show Iceland's economic turmoil is far from over, and consumer confidence this month has plunged to its lowest level since measurements began in 2001. It has fallen 23 percent compared to the prior month and 83 percent compared to its level a year earlier, Reuters reports.

The change in government could also relaunch a debate about Iceland's place in Europe. The outgoing government and the conservative Independence Party had long opposed EU membership.

The Left Greens also remain rather sceptical, but the Social Democrats favour EU membership and reportedly want to hold a referendum on the issue.

Ukraine slams grain trade restrictions at EU summit

Restrictions on Ukrainian agricultural exports to the EU could translate into military losses in their bid to stop Russia's war, Ukrainian president Volodymyr Zelensky warned EU leaders during their summit in Brussels on Thursday.

Difficult talks ahead on financing new EU defence spending

With the war in Ukraine showing no signs of ending any time soon, EU leaders will meet in Brussels on Thursday and Friday (21 and 22 March) to discuss how to boost the defence capabilities of Ukraine and of the bloc itself.

Opinion

Why UK-EU defence and security deal may be difficult

Rather than assuming a pro-European Labour government in London will automatically open doors in Brussels, the Labour party needs to consider what it may be able to offer to incentivise EU leaders to factor the UK into their defence thinking.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us