Iceland Public Policy

Iceland Public Policy

Current policy

Iceland is a country located in the region of Northern Europe. See abbreviation for Iceland. After a new election to everything in October 2016, a bourgeois three-party government was formed with the independence party Bjarni Benediktsson as prime minister. Already in September 2017, the government fell because of a pedophile scandal. After another election in October of the same year, a broad coalition government joined the Conservative Independence Party, the Center-oriented Progress Party and the Left-Green Party.

The ruling coalition between the Social Democratic Alliance and the left-wing Left-Greens had to pay a high price in the election to everything in April 2013, for its mandate to take Iceland out of the deep economic downturn triggered by the 2008 banking crisis (see Modern history). The tough austerity policy to get the state budget in balance has hardened both on government cooperation and on Icelanders. Both the Alliance and the Left-The Greens lost half of their seats in the elections.

  • Countryaah: Country facts and history of Iceland, including state flag, location map, demographics, GDP data, currency code, and business statistics.

The bourgeois opposition in the form of the Independence Party and the Progress Party became the winner of the election after promising tougher corruption in its election manifesto and a halt to the negotiations for an Icelandic EU membership.

President Ólafur Ragnar Grímsson commissioned Progress Party leader Sigmundur Gunnlaugsson to form a new government. In May, he presented a coalition with the Progress Party and the Independence Party. The new bourgeois government could count on the support of a clear majority in everything.

Soon the government decided to pause the EU negotiations until the Icelanders said in a referendum on membership in the Union. Another decision was to assist with debt relief for homeowners who were trapped during the crisis years, a program that was completed in 2015. The government also announced investments in oil and natural gas extraction to increase the country’s income.

In December 2013, the legal settlement after the banking crisis reached the top tier of business when four former executives of Kaupthing Bank were sentenced to between three and five years in prison for illegally withholding important information during the crisis. A short year later, Landsbanki’s former CEO was sentenced to one year in prison for manipulating the market at the beginning of the crisis.


EU membership is no longer relevant

In February 2014, the Government of Iceland withdrew the EU application and announced at the same time that the planned referendum on Icelandic EU membership would not be held. Just over a year later, the country formally informed the European Commission that it no longer applied for membership in the Union.

The clean-up in the country’s financial sector was complete and the country’s economy had begun to recover well for a few years, not least thanks to good income from fishing, when the next crisis was a fact. In April 2016, an international network of burgeoning journalists revealed through the Panama Papers that Prime Minister Gunnlaugsson and his wife had invested tens of millions of dollars in a mailbox company in the British Virgin Islands tax haven. The country’s interior minister and finance minister were also mentioned in the documents.

The patience of the hard-pressed Icelanders was short with such behaviors by politicians, and soon thousands of people gathered outside everything, demanding the departure of the prime minister. The Left Opposition demanded a vote of confidence in everything. But it was only when the coalition partner Independence Party withdrew its support for the prime minister that he resigned.

The government was reformed with the same two parties as before. New prime minister became Minister of Agriculture and Fisheries Sigurður Ingi Jóhannsson. New elections for everything were announced until October 29 of that year.

In June 2016, history professor Guðni Jóhannesson was elected new president. Jóhannesson is an expert on political history and diplomacy, among others, and has no pronounced party affiliation. He took office on August 1 of that year.

Shortly before the election, the four opposition parties announced the Pirate Party, the Left-Green, the Alliance and the Bright Future, that they agreed to form government if they won a majority in everything.

New Election 2016

In the October election, neither the government parties nor the opposition got their own majority in everything. The Independence Party became the largest party, while the Progress Party more than halved. The Pirate Party increased from 3 seats to 10. A new Liberal Party, the Resurrection (or Reform Party), entered into everything. The day after the election, Prime Minister Jóhannsson from the Progress Party announced his departure.

The government negotiations came to an end. Only ten weeks after the new election, January 10, 2017, the Independence Party leader Bjarni Benediktsson announced that a bourgeois coalition government was formed between the Independence Party, the Resurrection Party (or the Reform Party) and the bright future, with Benediktsson as prime minister. In his presentation, Benediktsson said that a referendum on Icelandic EU membership could become “an opportunity” at the end of the term of office.

Already in September of that year, the new government cracked down when Bright’s future left the tripartite coalition. Prime Minister Benediktsson resigned and new elections were announced. Bright future left the government in protest against Benediktsson not informing the rest of the ministers that his father, Benedikt Sveinsson, was trying to help a convicted pedophile get the crime cleared from the criminal record, which is possible in Iceland but has been criticized from several directions. Iceland’s Minister of Justice informed Prime Minister Benediktsson in July 2017 that his father had written a letter in support of the pedophile’s quest to have the crime eradicated. Benediktsson chose to silence this until a parliamentary committee took up the case. Through the fallout of the bright future, the government lost its majority in everything.

New Election in October 2017

The glare of the future of the future led to yet another election to everything. When held in October 2017, the Independence Party remained the largest, but backed from 21 seats in the 2016 election to 16. The Social Democratic Alliance increased its representation from 3 to 7 seats, while the Pirate Party declined from 10 to 6 seats. The newly formed Center Party, which was formed just weeks before the re-election of several heavy names in the Progress Party, received 7 seats, while the future of Light fell out of everything.

After protracted negotiations in November 2017, a broad coalition government was formed between the Independence Party, the Progress Party and the Left-Green Party. Prime Minister Katrin Jakobsdottír, leader of the Left-Greens. Bjarni Benediktsson was appointed finance minister while Gudlaugur Thór Thórdarson was allowed to remain at the post of foreign minister. According to Prime Minister Jakobsdóttir, the government wanted to strengthen equality in the country, receive more refugees and increase investment in health care and care.

Corona pandemic

When the corona pandemic began to spread in China and then in the rest of the world in early 2020, Iceland invested early on performing virus testing on a large scale. The first case of covid-19, the disease caused by the coronavirus, was reported in late February. In March, high schools and universities were closed, which was followed by sports facilities, cinemas and restaurants. By mid-April, a tenth of Icelanders, around 36,000, had been tested for covid-19, which was a higher proportion of the population than in any other country. About 1,700 Icelanders had been reported infected, but only eight people had died. Since so many people had been tested, people who carried the virus, even without symptoms, were able to isolate themselves and avoid spreading it further. After that, a gradual opening of society began again: the students could be taught again in the schools while the activities in everything from hairdressing salons to museums started again. In May, the government reportedly largely eradicated the virus, as 97 percent of those infected now were healthy.

Read more about the events in the Calendar.


Official name

Lydveldid Island / Republic of Iceland


republic, unitary state

Head of State

President Guðni Jóhannesson (2016–)

Head of government

Prime Minister Katrin Jakobsdottír (2017–)

Most important parties with mandates in the last election

Independence Party 16, Left-Green 11, Alliance 7, Center Party 7, Progress Party 8, Pirate Party 6, People’s Party 4, Reform Party 4 (2017)

Main parties with mandates in the second most recent elections

Independence Party 21, Left-Green 10, Pirate Party 10, Progress Party 8, Resurrection 7, Bright Future 4, Alliance 3 (2016)


79% in the 2016 general election, about 76% in the 2016 presidential election, 81% in the 2017 general election

Upcoming elections

general election 2021, presidential election 2020

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