Iceland: Government

Principal Government Officials

Chief of State: President Ólafur Ragnar Grímsson
Head of Government: Prime Minister Sigmundur Davíð Gunnlaugsson

The president, elected to a 4-year term, has limited powers. When Iceland became a republic in 1944, the post of president was created to fill the void left by the Danish king. Although the president is popularly elected and has limited veto powers, the expectation is that the president should play the same limited role as a monarch in a traditional parliamentary system. The president can force a public referendum on a proposed law by refusing to sign it. President Olafur Ragnar Grimsson has referred legislation to referendum three times (one time the legislation was withdrawn before the referendum could be held).

The prime minister and cabinet exercise most executive functions. The parliament is composed of 63 members, elected every 4 years unless it is dissolved sooner. Suffrage for presidential and parliamentary elections is universal for those 18 and older, and members of the parliament are elected on the basis of parties' proportional representation in six constituencies. The judiciary consists of the Supreme Court, district courts, and various special courts. The constitution protects the judiciary from infringement by the other two branches.

As of October 2011, parliament was debating a new draft constitution based on the work of a constitutional committee. The members of the constitutional committee had been elected in November 2010, but the Supreme Court nullified the election results in January 2011 due to voting irregularities; members were instead appointed by the government.

POLITICAL CONDITIONS
Iceland's current government consists of a majority coalition between the center-left Social Democratic Alliance (SDA) and the leftist, environmentally focused Left-Green Movement (LG). The SDA-LG coalition, which holds 34 out of the 63 seats in parliament, was elected on April 25, 2009 in early parliamentary elections that were prompted by the country's economic crisis in the fall of 2008. The Chair of the SDA party, Johanna Sigurdardottir, is Iceland's first female Prime Minister and LG Chair Steingrimur J. Sigfusson serves as the country's Finance Minister. The government has initiated significant economic reforms and submitted Iceland's application to join the European Union (EU).

There are five political parties represented in parliament:

Social Democratic Alliance:                                                                                                                                                                            Formed in 2000 from three leftist parties--the Social Democratic Party, the People's Alliance, and the Women's List--the SDA was created to challenge the long-dominant Independence Party. Though this effort failed initially, under the leadership of Ingibjorg Solrun Gisladottir, the SDA eventually formed a coalition government with the Independence Party (IP) in 2007. It is now the senior member in a government coalition with the LG. The party has worked to reconcile the widely varying foreign policy views of its members, which range from strong support for NATO membership to pacifism and neutrality. The SDA is also the most openly pro-EU of Iceland's political parties.Formed in 2000 from three leftist parties--the Social Democratic Party, the People's Alliance, and the Women's List--the SDA was created to challenge the long-dominant Independence Party. Though this effort failed initially, under the leadership of Ingibjorg Solrun Gisladottir, the SDA eventually formed a coalition government with the Independence Party (IP) in 2007. It is now the senior member in a government coalition with the LG. The party has worked to reconcile the widely varying foreign policy views of its members, which range from strong support for NATO membership to pacifism and neutrality. The SDA is also the most openly pro-EU of Iceland's political parties.       

Left-Green Movement:                                                                                                                                                                                        The LG was founded in 1999 by a group of politicians who did not agree with the planned merger of the leftist parties in Iceland that resulted in the SDA. The Left-Greens won a respectable 9% of the vote (5 seats) in 2003, but in the 2007 election they improved significantly, with 14% of the total vote (9 seats). The LG captured 22% of the vote and 14 seats in the 2009 election and joined the SDA as the junior partner in the coalition government. As its name implies, the party is focused on a Nordic socialist model of governance with a strong emphasis on environmental issues. It formally opposes EU membership for Iceland but is open to change should the Icelandic public demand it.        

Independence Party:                                                                                                                                                                                     The IP was formed in 1929 and is the center-right political party in Iceland. Iceland's recent political upheaval follows nearly 2 decades of relative stability under the IP, much of it marked by an Independence-Progressive coalition that was in power from 1995-2007. Longtime IP leader David Oddsson was Prime Minister from 1991-2004, making him the longest-serving prime minister in Europe. The IP elected parliamentarian Bjarni Benediktsson to follow former Prime Minister Geir Haarde as Party Chairman in late March 2009, after Haarde announced in January his intent to leave politics while undergoing treatment for esophageal cancer. Following the economic collapse of 2008, the IP undertook a thorough review of its policy on joining the EU, concluding that the question should be decided by a national referendum at the conclusion of accession negotiations with Brussels. Party support plummeted to 24% (16 seats) in the elections in April 2009, from 37% (25 seats) in the 2007 elections.                                                                                                                                                                                         

Progressive Party:                                                                                                                                                                                             The centrist agrarian Progressive Party has been a party to government for over 30 of the past 40 years. Its support dropped from 23% (15 seats) in the 1995 parliamentary election to 12% (7 seats) in 2007. The party, however, rebounded slightly in 2009 receiving 15% of the vote and nine seats in parliament. The Progressive Party has faced internal instability in the past few years, and power struggles have led to frequent change in the party's leadership. Current Chairman Sigmundur David Gunnlaugsson was elected at the party's national congress in January 2009, following the sudden resignation of Gudni Agustsson in November 2008. Agustsson himself had replaced Jon Sigurdsson after the party's disastrous showing in the 2007 elections.        

Citizens' Movement:                                                                                                                                                                                     The Citizens' Movement was the only new party to successfully use protests about the government's management of the economic crisis in 2008-2009 to launch itself into prominence. Subsequently, internal strife has torn the party apart. All four members resigned from the party; one joined ranks with the Left-Green Movement and the other three formed a parliamentary group called The Movement, which has no constituency. 

Iceland's current President is Olafur Ragnar Grimsson, a former political science professor who led the far-left People's Alliance in 1987-1995 and served as Finance Minister in 1988-1991. Although Grimsson won office with only a 41% plurality in 1996, he was not challenged for re-election in 2000 and was re-elected again in 2004. In 2008, Grimsson was once more re-elected without opposition. This follows a well-established tradition of giving deference to sitting presidents. Once in office, a president can generally count on serving as many terms as he or she likes, assuming good behavior. Reflecting the belief that the president is "above politics," presidential candidates run for election as individuals--since 1952, political parties have played no role in nominating or endorsing candidates.

FOREIGN RELATIONS
Iceland maintains diplomatic and commercial relations with practically all nations, but its ties with other Nordic states, with the United States, and with the other NATO member states are particularly close. Icelanders remain especially proud of the role Iceland played in hosting the historic 1986 summit in Reykjavik between President Ronald Reagan and Soviet leader Mikhail Gorbachev, which set the stage for the end of the Cold War.

Iceland has greatly increased its international profile since the early 1990s. From the mid-1990s until 2007, Iceland opened a number of missions overseas, including in all five permanent member countries of the UN Security Council in anticipation of its (ultimately unsuccessful) bid for a rotating seat on the UN Security Council in 2009-2010. The buildup also included missions to the Council of Europe in Strasbourg and to the Organization for Security and Cooperation in Vienna. In 1998, it bolstered its delegation to NATO, assigning a permanent representative to the military committee for the first time ever. However, in the wake of the economic crisis in fall 2008, the Ministry for Foreign Affairs announced budget cuts resulting in the closure of four overseas missions. Iceland currently has 20 missions in 16 countries.

European Union (EU) membership was one of the top campaign issues in the 2009 parliamentary elections. The parliament voted in favor of applying for EU membership in July 2009, and Iceland was granted candidate status on June 17, 2010. Formal accession negotiations began at an intergovernmental conference in Brussels on July 27, 2010 and are expected to last several years. After the negotiations are concluded, the Icelandic people will determine by national referendum whether the country joins the EU. Icelanders also have a strong emotional bond with the Baltic states, and Iceland prides itself on being the first country to have recognized these countries' claim for independence in 1991.

Despite its status as an unarmed nation, Iceland has sought to do its part to contribute to the maintenance of international peace and security. One of the niches it is helping to fill is in civilian peacekeeping and crisis management. It took a significant step forward in this area in 2001 by launching its Icelandic Crisis Response Unit (ICRU). In setting up the ICRU, the Ministry for Foreign Affairs established a roster of over 100 experts in various occupations (police officers, nurses, doctors, lawyers, engineers, journalists, etc.) who are specially trained and prepared to deploy to trouble spots abroad on short notice. Due to financial constraints, Iceland has had to dramatically reduce the number of deployed peacekeepers serving worldwide, although the country was one of the first on the ground after the devastating 2010 Haiti earthquake.

Membership in International Organizations
Iceland is a member of the following organizations: Arctic Council, Barents Euro-Arctic Council; Council of Baltic Sea States; Council of Europe; European Economic Area; European Free Trade Organization; EFTA Court; EFTA Surveillance Authority; North Atlantic Treaty Organization; Organization for Security and Cooperation in Europe; Organization for Economic Cooperation and Development; International Criminal Police Organization; International Council for the Exploration of the Sea; International Hydrographic Organization; International Maritime Satellite Organization; International Union for the Publication of Custom Tariffs; Nordic Council; North-East Atlantic Fisheries Commission; North Atlantic Salmon Conservation Organization; the International Whaling Commission; and the North Atlantic Marine Mammal Commission.

It also is a member of the United Nations and most of its related organizations, specialized agencies, and commissions, including the International Monetary Fund, World Trade Organization, World Tourism Organization, Food and Agricultural Organization, International Atomic Energy Agency, International Civil Aviation Organization, International Fund for Agricultural Development; Industrial Development Organization; International Labor Organization, International Maritime Organization, International Telecommunications Union, UN Educational, Scientific, and Cultural Organization, Universal Postal Union, World Health Organization, and World Meteorological Organization; World Intellectual Property Organization; International Bank for Reconstruction and Development; International Development Association; International Finance Corporation Multilateral Investment Guarantee Agency and International Center for Settlement of Investment Disputes; UN Conference on Disarmament; Economic Commission for Europe; UN High Commissioner for Refugees; Office for the High Commissioner for Human Rights; UN Conference on Trade and Development.

Sources:

CIA World Factbook (November 2011)
U.S. Dept. of State Country Background Notes ( November 2011)

Glossary