Iceland’s Social Democrats Win Snap Election, Facing Economic Challenges

Iceland’s centre-left Social Democratic Alliance emerged victorious in Saturday’s snap elections, securing the most seats in the Althingi, the country’s parliament, Al Jazeera reports.

The final count, released Sunday by state broadcaster RUV, shows the Social Democrats winning 15 of the 63 seats with 20.8% of the vote.

The result marks a significant surge for the Social Democrats, more than doubling their seat count from the 2021 election. Their leader, Katrin Jakobsdottir, is now poised to attempt forming a coalition government.

The conservative Independence Party, which led the outgoing coalition government, secured 14 seats (19.4% of the vote), while the centrist Liberal Reform Party won 11 seats (15.8%). Three other parties also gained representation in the new parliament. Notably, the Pirate Party lost all its seats.

The snap election was called by Prime Minister Bjarni Benediktsson following the collapse of his seven-year-old coalition government. Disagreements over immigration, energy policy, and the struggling economy fueled the political impasse.

Incoming Prime Minister Jakobsdottir faces a formidable challenge: addressing Iceland’s high cost of living. Inflation, which peaked at 10.4% in February 2023, remains significantly higher than in many other countries, standing at 5.1% in October, compared to 2.6% in the US and 2.3% in the European Union.

Further straining public finances are the consequences of repeated volcanic eruptions in southwestern Iceland, which have caused significant displacement. Immigration has also become a contentious issue, with the number of asylum seekers sharply increasing in recent years to over 4,000 annually, a substantial jump from the previous average of fewer than 1,000, in a country with a population under 400,000. Jakobsdottir’s government will need to navigate these complex economic and social issues to maintain stability.