Icelandic centre-right parties in coalition talks after election win

City A.M. Reporter
ICELAND’S centre-right parties prepared for coalition talks yesterday after defeating the ruling Social Democrats in elections with promises of ending austerity measures five years after a financial collapse.

With nearly all the ballots counted, the Independence Party took 26.7 per cent of the vote and the Progressive Party 24.4 per cent, both gaining 19 seats in the Althing, or parliament.

The Social Democrats were a distant third with 12.9 per cent.

Once a European financial centre, the windswept north Atlantic island of glaciers, geysers and volcanoes has struggled after the financial crash that brought it to its knees in October 2008.

The Social Democrats stabilised the economy with a bailout package hailed as exemplary by the IMF. But policy blunders, tax hikes, leniency toward foreign creditors and their inability to deal with household debt cost them popularity.

“We are offering a different road, a road to growth, protecting social security, better welfare and job creation,” said Independence leader Bjarni Benediktsson, a 43-year-old former professional football player who is favourite to become the next prime minister.

The Independence party won the popular vote but earned as many seats in parliament as Sigmundur Gunnlaugsson’s Progressive Party, setting the stage for a two-way tussle.

Coalitions in Iceland are traditionally agreed within days.