ICELAND: Popular Discontent Topples Government [29 January 2009]
21 Feb 2010 2252MST Summary: Protests over the handling of the economy and the ambitions of greens and social democrats bring down the conservative government.
Development: After months of protests organized by the Left-Green Movement Alliance (LGMP) Foreign Minister Ingibjorg, and leader of the left wing Social Democratic Alliance (SDA), demanded the resignation of the Premier and leader of the center right, Geir Haarde. A new government has been appointed, made up of a coalition of the SDA and the Left-Green Movement Alliance.
Analysis: Iceland has been hit especially hard by bank failures, unemployment and other economic troubles. The opposition to the government has focused on the governor-in-chief of Iceland’s central bank, David Oddsson and the IMF bailout plan. The new coalition between the SDA and the LGMP will represent a significant shift in policy, especially considering the extreme opposition to the IMF bailout and the fiscal policies of the departed Haarde government. The new government’s policies on the IMF and other matters will determine the amount of economic hardship Iceland suffers, and the amount of stability it will have in the future. If Iceland cannot begin to halt the downward economic spiral, the Left-Green government could be more amenable to Moscow’s offer of financial assistance.
[Matthew Perry]