Iceland and Europe Part I

In January 1993 the Icelandic parliament ratified the Treaty on the European Economic Area (EEA), in January 1994 Iceland concluded an agreement on fisheries and environmental protection with the EU and in 1995 became a member of the Baltic Sea Council. In 2001 the Schengen Agreement came into force in Iceland.

In Iceland, which is governed by frequently changing coalition cabinets, the Independence Party (SF) and the Social Democratic Party (AF) formed the government under Prime Minister Davíð Oddsson (* 1948, SF), who was re-elected three times. Since 1995 he has been at the head of a coalition made up of SF and the Progress Party. According to the coalition agreement, Oddsson handed over the post of prime minister to the chairman of the progressive party Halldór Ásgrímsson (* 1947, † 2015) in September 2004. This resigned in June 2006 after a severe defeat of his party in the local elections. He was followed in office by the chairman of the independence party Geir Hilmar Haarde (* 1951).

After the parliamentary elections in May 2007, Haarde formed a coalition government made up of the Independence Party and the Social Democratic Party. In the course of the international financial market crisis, Iceland was threatened with national bankruptcy in autumn 2008. As a countermeasure, the Icelandic government took control of large parts of the financial sector and the three largest Icelandic banks Glitnir, Landsbanki and Kaupthing were nationalized. The government also sought a loan of US $ 2 billion from the IMF. A basic agreement on a support loan was reached in mid-November 2008. After months of street protests by Icelanders, who accused the politicians of failure in the financial crisis, Prime Minister Haarde saidon January 26, 2009 the resignation of his coalition government and announced early elections. On February 1st, 2009 the social democrat J. Sigurðardóttir was appointed prime minister of a left transitional government made up of social democrats and the previously opposition left-wing Greens. In the early parliamentary elections on April 25, 2009, this coalition won an absolute majority in parliament with 34 out of 63 seats. On July 23, 2009 Iceland submitted an application to join the EU.

According to petsinclude, persistent political opposition formed against a law on the compensation of foreign savers after the collapse of the banking system in 2009; it provided for a step-by-step repayment of € 3.9 billion to Great Britain and the Netherlands. In the face of popular opposition, President Grímsson prevented the law from coming into force and called a referendum in which the Icelanders rejected government debt repayment by 93.2% on March 6, 2010. In a second referendum on April 10, 2011, the Icelanders, with almost 60% of the votes cast, again rejected the repayment of debt to Great Britain and the Netherlands from taxpayers’ money. Against the former head of government Haarde A process was opened in June 2011 on the allegation of ignoring warning signs in the run-up to the financial crisis of 2008 and thus having contributed to the collapse of the Icelandic banking system. On April 23, 2012, a special court spoke to Haarde although complicit in the collapse of the financial sector, it did not impose a penalty. On October 20, 2012, a consultative referendum was held on a draft of a new constitution, including the abolition of the state church, a reform of the electoral law, the transfer of energy sources into inalienable public property and the reorganization of the fishing quotas. Around 67% of the electorate approved this draft, but it was not voted on in the Althing. In March 2013, the parliament was only able to agree on an adjustment of the modalities for a constitutional amendment. On April 15, 2013, Iceland was the first European country to sign a free trade agreement with the People’s Republic of China.

The ruling Social Democrats and the left-wing Greens suffered heavy losses in the parliamentary elections on April 27, 2013. The Social Democrats only got 12.9% (2009: 29.8%) of the vote and lost 11 of their 20 seats in parliament. 10.9% of the votes and thus 7 seats (2009: 21.7% and 14 seats) went to the left-green movement. The election winners were the center-right parties critical of the EU. The Independence Party received 26.7% of the vote and won 19 seats (2009: 23.7% and 16 seats). The Progress Party won 24.4% of the vote and 19 seats (2009: 14.8% and 9 seats). The two parties formed a coalition government led by Prime Minister S. D. Gunnlaugsson, leader of the Progress Party.

After the European Council decided in 2010 to start accession negotiations with Iceland, the government elected in 2013 has now suspended them. In March 2015, she officially withdrew the application for membership. In doing so, she kept her campaign promise.

Iceland and Europe 1

About the author