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2016 Elections - President & Parliament

Iceland's prime minister seemed to have resigned April 05, 2016 in a wave of massive protests following revelations about his questionable offshore investments. Iceland’s opposition party filed a motion of no-confidence. Almost 28,000 Icelanders, in a country of just 320,000 inhabitants, signed a petition demanding his resignation.

The government in Reykjavik said 08 June 2015 capital controls - imposed after the collapse of the island's banking system in 2008 - would be eased. It added that legislation would be introduced shortly to unfreeze 1,200 billion Icelandic crowns ($9 billion, 8 billion euros) in assets that had been under restriction for seven years. The government emphasized that the measure would mean that assets recovered from failed banks would be able to leave the country, but would be subjected to a 39-percent levy Reykjavik chose to call a "stability tax." "We're taking unprecedented measures to address unprecedented circumstances," Prime Minister Sigmundur Gunnlaugsson said in a statement.

President Olafur Ragnar Grimsson, who cut short his US visit, refused Prime Minister Sigmundur David Gunnlaugsson's request to dissolve the government and parliament and call new elections, following the release of the so-called Panama Papers. Prime Minister Gunnlaugsson was under pressure to resign from thousands of protesters since documents showed he and his wife set up a company with the help of a Panamanian law firm at the center of a massive tax data leak. Gunnlaugsson denied doing anything illegal, saying all taxes were paid. Gunnlaugsson was among 140 politicians and public officials around the world named in the Panama Papers that raised questions about alleged financial misconduct.

By Iceland's prime minister later said he had not resigned, as previously reported, but has merely "suggested" that the vice chairman of his party take over the office "for an unspecified amount of time." He stepped aside ahead of a planned no-confidence vote in parliament, with the ruling Progressive Party naming its deputy leader, Sigurdur Ingi Johannsson, to take over as the country's new leader.

The president is directly elected by simple majority popular vote for a 4-year term. There are no term limits for the president of Iceland. The office of the president of Iceland is open to all legal residents of Iceland who are eligible to vote in general elections and are at least 35 years of age. Prospective candidates must also secure a list of at least 1,500 referees for their candidacy.

Icelanders elected historian Gudni Johannesson as their first new president in 20 years. The final count on 25 June 2016 showed 39 percent of Icelanders voted for him placing him ahead of a former prime minister and central bank governor. The post is largely ceremonial but does carry powers to block legislation. The political newcomer ran for presidency amid distrust of politicians and business leaders after the 2008 global financial crisis and the Panama papers scandal. In the end, more people than expected turned out with preliminary figures saying 185,000 out of 245,000 of those eligible to vote made it to polling stations. His first day in office was 01 August 2016, when he succeeded Olafur Ragnar Grimsson, who did not want to stand again after 20 years and five terms in office.

Icelanders' faith in their political and financial establishment was shaken after the 2008 financial crisis and further eroded this year when several senior government figures implicated in global tax evasion were outed by the release of the so-called Panama Papers. The biggest protests in the country's history ultimately led to the resignation of Prime Minister Sigmundur David Gunnlaugsson of the Progressive Party and the early election.

Iceland has a unicameral Alþingi (parliament) composed of 63 seats, with members serving 4-year terms. Members of Parliament are directly elected in multi-seat constituencies by proportional representation vote to serve 4-year terms.

Elections for the Althingi were held on 29 October 2016. An April 2016 opinion poll by Icelandic media outfits Fréttablaðið, Stöð 2 and Vísir gave Iceland’s Pirate Party a record 43% of the vote. In a time of massive political unrest in Iceland, the open-democracy party has extended its lead as the nation’s most popular choice for the general elections. The current government parties – beleaguered by the current worldwide Panama Papers scandal – lost out in this poll. 21.6% percent would vote for the Independence Party, 11.2% for the Left-Green Movement, 10.2% for the Social Democratic Alliance, 7.9% for the Progressive Party, and 3.8% for Bright Future.

A September 2016 opinion poll for the general elections indicated a massive surge in support for the centre-right Independence Party (‘Sjálfstæðisflokkurinn’) – which could mean that the current two-party coalition could hold on to power. The poll, published in Icelandic daily Fréttablaðið, gave the Independence Party 34.6% of the vote. This was in stark contrast to many recent polls which put support for the party in the low to mid-twenties. The same poll showed a massive decline in support for the Pirate Party. Once polling in the high thirties, the open democracy Pirates garnered just 19.9% support.

A poll from Market and Media Research on 26 September 2016 showed the Independence Party and the Pirate Party at a statistical tie, and it was still too soon to say if the tide is turning for either of them. According to the poll results, both were polling at 22.7%. For the Pirates, this is up from 22.4% in the last poll and thus shows little change between polls, while the Independence Party polled at 24.6% last time around. As such, they remained the two highest-polling parties in the country, as they had been since March 2015.

A 27 October 2016 poll conducted by Visir and Stod 2 showed 37 percent support for the government parties, while the four opposition parties polled around 47 percent combined. Turnout in Iceland is normally high at about 80 percent, but as in most countries, young voters are less likely to cast their ballots.

Center-right Independence Party leader Bjarni Benediktsson declared his party the winner and expected to form the next ruling coalition. After his Progressive Party suffered a severe battering, losing 11 seats and dropping 13 percentage points, Prime Minister Sigurdur Ingi Johannsson has announced his resignation, paving the way for the next government. It appeared likely that the Independence Party will form a coalition with its allies, the Progressive Party and the Regeneration Party. The anti-establishment Pirate Party, tripled its seat tally to 10, but the Pirates' final tally was lower than the party had hoped for. In April, the party was polling at around 40 percent. It could take power in a left-leaning coalition with its three centre-left allies, but the coalition won 27 seats, not enough to upset the formation of a center-right coalition.

Iceland‘s new government formally took office 11 January 2017, the products of months of negotiations that saw multiple failed attempts at coalition building since October elections. The three-party coalition comprises Prime Minister Bjarni Benediktsson‘s conservative Independence Party, and two smaller liberal parties, the Reform Party and Bright Future. The Independence Party has six members in the 11-strong cabinet. One of them, Gudlaugur Thor Thordarson, was named foreign minister. The Reform Party secured three portfolios. The new governing parties differ on membership in the European Union. The government platform said that any possible proposals to resume membership talks would not be discussed until "the end of the legislative period."







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