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ICELAND: People Power Produces Unexpected Muscle

Lowana Veal

REYKJAVIK, Jan 26 2009 (IPS) - The government has fallen in Iceland in the wake of an unprecedented season of protests.

Demonstrators outside the government building in Reykjavik. Credit: Lowana Veal

Demonstrators outside the government building in Reykjavik. Credit: Lowana Veal

The collapse came fast through the last few days of demonstrations. The present government was elected in May 2007 and was not due to be re-elected until 2011.

“Incompetent government”, chanted demonstrators outside the government building in downtown Reykjavik as the Christmas break ended Jan. 20.

A day later, there was no regular Althingi (government) meeting; in the evening, a meeting of the Reykjavik branch of the Social Democratic Alliance (SDA) met and voted to call for elections and terminate their coalition with the conservative Independence Party (IP). Together, these two parties formed the ruling coalition.

This was an about-turn by the SDA, as their Chair, Ingibjorg Solrun Gisladottir (who was undergoing medical treatment in Sweden at the time of the meeting), had previously said they would continue their coalition with the Independents, and that now was not the time to call an election.

But after a meeting all weekend to discuss whether it was possible for the SDA and IP to continue running the government, it was announced Monday that the government has fallen.

Prime Minister Geir Haarde from the Independence Party said that it had become increasingly difficult to work with the SDA. The crunch came when the SDA wanted the prime minister’s office. The IP refused to relinquish the position.

Minister for Commerce, Social Democrat Bjorgvin Sigurdsson resigned Sunday, and demanded a shake-up of the Financial Supervisory Authority (FSA). Sigurdsson was responsible for the banks, and has been a key figure in decisions and measures taken since the crisis.

Following this Jonas F. Jonsson, director-general of the FSA and all members of the board of governors resigned. Jonsson will continue working till the end of February but the resignation of the others takes effect immediately.

Meetings are ongoing within all parties on what will happen next. Likely possibilities are either a national unity government or a government of the SDA and the Left-Greens, with support from the Progressive Party.

According to an opinion poll published in the newspaper Frettabladid on the weekend, 45 percent of respondents want a national unity government.

A new government will have to take note of the extraordinary display of anger that grew since the financial crisis exploded upon both the government and the banking system. Since the Althingi resumed, protests lasting well into the night became a daily event.

They would start just after mid-day and continue into the early hours of the morning, sometimes with bonfires on the grassy area opposite the Althingi, which the police tried to extinguish every now and then. On Friday night the protest ended earlier, because there was a consensus not to mix drunkenness with the demonstration.

On Saturday night the crowd refocused their protest outside a hotel in the town centre where the Central Bank of Iceland (CBI) staff were holding their annual celebration.

On Sunday night the protest moved to outside the premises of the CBI. Again, a bonfire was lit and a shake-up of the CBI demanded.

Numbers at the demonstrations ranged from a few hundred to a few thousand. The population of Greater Reykjavik is about 160,000 while that of Iceland around 319,000.

The first protests came in October, after the collapse of the banks. Songwriter Hordur Torfason led weekly Saturday demonstrations for the last 16 weeks. The latest demonstration was one of the largest.

The protesters are still not satisfied. “The demands haven’t been met, they are only a vague promise. We want the FSA and CBI executives out now, not later. The protests will continue until all our demands are met,” says Torfason.

“We don’t want the same kind of elections, as nothing new will happen,” Magnus Bjorn Olafsson, one of the speakers at last Saturday’s demonstration said. “We want a new kind of democracy, and a new constitution.”

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