Prime Minister accepts results, set to resign

REYKJAVIK: Politician and co founder of Iceland’s Pirate Party Birgitta Jonsdottir (C), Asta Gudrun Helgadottir (2nd,L) and fellow activists react as the election results are announced at their election gathering. — AFP

REYKJAVIK: Iceland was headed for tense talks over its next government after an alliance led by the anti-establishment Pirate Party gained ground against the ruling centre-right in a vote triggered by the Panama Papers scandal.  Final figures from Saturday's snap election pointed to a deadlocked outcome, opening the way for tough horse-trading over the next government in the North Atlantic island nation.

Prime Minister Sigurdur Ingi Johannsson told the national broadcaster RUV he would resign yesterday. Negotiations on forming a government are to be led by Finance Minister Bjarni Benediktsson, whose conservative Independence Party won most seats. According to final results issued on Sunday, the governing coalition-the Independence Party, allied with Johannsson's centrist Progressive Party-gained 29 seats in the 63-member parliament.

The Pirates and its three centre-left allies won 27 seats, reaping gains from popular anger with establishment parties but falling short of a majority in the legislature, the Althingi. The Pirates and the Left-Green Movement each picked up 10 seats, the Social Democrats three, and the centrist Bright Future Movement won four.

Kingmaker party

The centrist Regeneration Party, which won seven seats, now finds itself able to determine the fate of coalition talks. But negotiations between Regeneration and Benediktsson's Independence Party could be tough. The parties fell out over holding a referendum on resuming the nation's EU membership talks, stalled by the incumbent conservative government.

"We have not been negative towards other parties or how governments should be formed," the leader of the Regeneration Party, Benedikt Johannesson told AFP.  But, he predicted, his party could be "very demanding in the bargaining process" with the Independence Party. The election was triggered after the Panama Papers revealed that 600 Icelanders including cabinet ministers, bankers and business leaders had holdings stashed away in offshore accounts.  The scandal claimed the scalp of Johannsson's predecessor, Sigmundur David Gunnlaugsson, mired in allegations about family holdings stashed in tax havens.

The episode revived public anger first stirred by the 2008 financial crisis, which wrecked Iceland's banking industry and plunged the country into recession, prompting it to seek a humiliating bailout from the International Monetary Fund (IMF).

'Like Robin Hood'

The Pirates Party laid down a five-point program that includes constitutional change to make leaders more accountable, free health care, greater protection of natural resources and the closure of tax loopholes for large corporations. The leaders of the party, set up just four years ago by anarchists, activists and hackers, said they was pleased with its  advances, even if an absolute majority failed to emerge.

"We are very satisfied," said cofounder Birgitta Jonsdottir, an activist, poet and WikiLeaks supporter. "We are a platform for young people, for progressive people who shape and reshape our society... like Robin Hood because Robin Hood was a pirate, we want to take the power from the powerful to give it to the people," Jonsdottir told AFP, referring to the English outlaw of legend.

Gretar Eytorsson, professor of political science at the University of Akureyri, said the Pirates did not gain a majority because not enough young people went to the polling stations despite a near 80 percent overall turnout. "What was suspected happened. The young voters did not show up," he told AFP.  "That was most likely the biggest reason for their loss... compared with the polls. But let's not forget that they are a much bigger party now." Iceland, a volcanic island with a population of 332,000, has returned to prosperity since its 2008 financial meltdown. Gross domestic product growth is expected to be above four percent this year thanks to tourism revenues and a recovering financial system. - AFP