2009-01-27

Scandinavian Politics: Iceland's government falls

Hej to all on the Scandinavian Politics list,

Just a very brief note, in a very busy week, on developments in Nordic
politics.

In FINLAND and SWEDEN, the parties are putting together their candidate
lists for the European elections in June. This is a fascinating process,
but I won't go into it here (except to mention that the Swedish
Christian Democrats have got themselves into a right pickle in trying to
keep one of their more conservative figures away from proceedings).

The same thing is happening is DENMARK, but this has been rather
overshadowed by the opening of parliamentary hearings (in which my
compatriot, Ian Manners of the Danish Institute for International
Studies, has been centrally involved) into Denmark's relationship with
the European single currency. The pegged exchange-rate between the krone
and euro has forced the Danish central bank to raise interest rates in
the middle of a recession, à la 1992, which is not very desirable.

The prime minister, Anders Fogh Rasmussen, has said that a new
referendum on the subject would require support from all the pro-EU
parties, which excludes his government's usual supporters in the Danish
People's Party, but which these days includes the Socialist People's
Party. It's leader, the wily Villy Søvndahl, sounds sceptical; but his
conditions for his party's support for a referendum don't seem
insurmountable. Agreeing to a referendum would remove another obstacle
to the Socialist People's Party's cementing a Norwegian- and
Swedish-style alliance with the Social Democrats (Søvndahl's party has
also been outlining its plans for government, which confirm its move
towards the centre).

But it's ICELAND where, as you've probably heard, it's all happening.

Pressure had been steadily building on the governing coalition of the
broad right-wing Independence Party and the social democratic Alliance.
Protests at the govermnent's and the central bank's handling of the
country's economic catastrophe have been escalating, and, remarkably for
Iceland, turning increasingly violent. On Friday the Independence prime
minister, Geir Haarde, conceded that an early election could be held, in
May (as well as announcing that he was suffering from cancer). On Sunday
the Social Democratic minister of commerce resigned, and called for the
head of the financial regulator to do the same. His party leader,
foreign minister Ingibjorg Gisladottir (herself recovering from the
removal of a brain tumour), called for the head of the central bank -
long-serving former Independence prime minister David Oddsson - to
resign, too. Yesterday the government collapsed.

President Olafur Ragnar Grimsson has asked Gisladottir to try to form a
government, and she's currently negotiating with the Left-Green Movement
over a minority administration. One possible consequence is a quick move
to start an Icelandic application for EU membership, something that's
taken up in this week's Economist
(www.economist.com/world/europe/displaystory.cfm?story_id=12972641). The
FT's coverage of Iceland's crisis is also good (www.ft.com/iceland).

Nick Aylott.
--
Dr Nicholas Aylott, senior lecturer (docent) in political science
School of Social Sciences, Södertörn University, Stockholm
SE-141 89 Huddinge, Sweden
www.sh.se/samhallsvetenskaper

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