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25th Sep 2022

Anti-EU parties poised to win power in Iceland

  • Iceland is expected to oust the pro-EU ruling social democrat party in parliamentary elections on Saturday. (Photo: Ane Cecilie Blichfeldt /norden.org)

Iceland's EU-sceptic opposition groups are facing off with the island-nation's pro-EU government ahead of a general election on Saturday (27 April).

Polls indicate voters are likely to unseat the ruling Social Democrats in favour of the Progressive or Independence centre-right parties. The Financial Times reports one in two are likely to vote for a different party than they voted for in the last parliament elections in 2009.

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Both the opposition parties reject imposed austerity measures and have promised an end to capital controls, to boost debt relief for households and to lower taxes.

They are expected to shape a coalition if they win.

"What the economic crisis in Iceland and Europe has taught us is the importance of being able to control your own destiny," Sigmundur David Gunnlaugsson, the head of the Progressive Party, told the Wall Street Journal in an interview on Thursday.

Gunnlaugsson is tipped to become the next head of government.

The two parties differ on foreign relations.

The Independence party wants to maintain strong ties with the Union but without joining the club. The Progressive party wants to seek closer ties with countries outside the Union.

"It seems Europe has entered a period of historic decline," said Gunnlaugsson.

Iceland has bilateral trade agreements with the European Union and is a member of the border-free Schengen area. It exported almost a €1 billion worth of goods to the EU in 2011, mostly fish.

It also filed to join the EU in 2009, with accession negotiations officially launched in 2010.

But in mid-April, it also became the first European country to sign a free trade agreement with China.

Fishing represents some 40 percent of the small country's economy.

Joining the EU would mean quotas and rules would be negotiated and decided upon in Brussels - the two are already engaged in a mackerel quota dispute.

For her part, incumbent Prime Minister Joanna Sigurdadottir viewed EU membership as a way out of a 2008 banking crisis which left Iceland's economy in tatters.

At the time, many Icelanders saw the euro as a safe haven currency.

But recent polls indicate many are opposed to joining the EU.

Sigurdadottir has also come under fire for appearing to be too keen to pay back the foreign creditors of its failed banks, according to Reuters.

Iceland has paid back half of its loans from the International Monetary Fund and from fellow Nordic countries ahead of time. Economic growth was 2.6 percent in 2011, but it slowed to 1.8 percent last year.

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