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### Viewing cable 09REYKJAVIK12, ICELAND: RUMBLE IN REYKJAVIK SHAKES GOVERNMENT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09REYKJAVIK12 | 2009-01-21 17:05 | 2011-01-13 05:05 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Reykjavik

`

    VZCZCXRO1713
    PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
    RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
    DE RUEHRK #0012/01 0211722
    ZNR UUUUU ZZH
    P 211722Z JAN 09
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC PRIORITY 3951
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
    RUEKJCS/SECDEF WASHDC
    RUEATRS/DEPT OF TREASURY WASHINGTON DC
    RUEAIIA/CIA WASHDC

` `

    UNCLAS SECTION 01 OF 02 REYKJAVIK 000012

    SENSITIVE

    SIPDIS

    STATE FOR EUR/NB, INR-B
    OSLO FOR DATT
    DOD FOR OSD-P (FENTON)
    TREASURY FOR LAWRENCE NORTON AND ERIC MEYER

    E.O. 12958: N/A
    TAGS: PGOV PREL ECON PINR ASEC IC
    SUBJECT: ICELAND: RUMBLE IN REYKJAVIK SHAKES GOVERNMENT

    ¶1. (SBU) Summary:  The Icelandic parliament's return after its
    holiday recess has been marred by the largest protests the country
    has experienced since the 1949 debate over NATO membership.   By
    some estimates, as many as 2,000 demonstrators caused enough noise
    to force a halt to the opening legislative session on the afternoon
    of January 20.  The Althingi reconvened later in the day, amidst
    protests so severe that members of the cabinet were unable to leave
    the building for several hours after the session finally concluded.
    The demonstrations have carried on into a second day, forcing
    another disruption in the legislative schedule and sparking a tense
    confrontation in front of the Prime Minister's Office.  Tension
    within the governing coalition is at an all-time high, and the
    government appears to be at a loss for ways to lower the
    temperature.  Early elections later this year now seem a
    near-certainty, with even the Deputy Chair of the junior coalition
    party openly calling for them.  End Summary.

    ¶2. (U) On January 20, the Icelandic parliament -- the Althingi --
    reconvened after a month-long holiday break.  During the holiday
    recess, the protest movements sparked by this fall's economic
    collapse continued to organize at least one demonstration weekly,
    generally in the square in front of the Althingi.  Though attendance
    and enthusiasm dipped over the holidays, many predicted that
    pressure would start to rise again in January, both as a result of
    the Althingi's return as well as the fact that the severance
    packages from many of the autumn layoffs would expire during the
    month.  (Unemployment has gone from 5.8 percent on Dec. 24 to 7.3
    percent on January 20.)  A foretaste came on Dec. 31, when
    protestors burst into a hotel on the square where a televised talk
    show with the country's political leaders was taking place.  They
    were removed by police using pepper spray, but not before they
    managed to halt the broadcast by setting fire to some of the
    transmission equipment.

    ¶3.  (U) On January 20, as many as 2,000 protestors quickly
    surrounded the Althingi after it reconvened.  The atmosphere was
    tense as protestors generated thunderous noise, threw eggs,
    snowballs, and paint as they called for new elections while
    lawmakers tried to continue with their session. Some protestors
    banged on the windows of the parliament building and set off
    firecrackers.  Police used pepper spray repeatedly to control the
    crowd, which grew in size and intensity enough to force a delay in
    the Althingi session.   Inside the building, the opposition
    Left-Green Movement used question time and open debate to reiterate
    its support for the protesters, and several Left-Green MPs used the
    recess periods to go outside and join the protest.  Over 100 police
    officers were present and over 30 people were arrested, among them
    many teenagers.  As night fell, the demonstrators lit a bonfire
    outside the Althingi and added park benches as well as the Christmas
    tree given annually to the City of Reykjavik from Oslo.  Some MPs,
    including the Speaker of the Parliament, could not leave the
    building until late evening.   The protest ended shortly after 3
    a.m. following a series of violent confrontations between police and
    small groups of protestors.  Most observers report that the
    demonstrations were only equaled by the unforgettable 1949 protests
    against NATO accession.

    ¶4. (U) The following day, as protestors gathered again outside the
    building, the Speaker of the Althingi cancelled the parliament's
    scheduled session and instead held a meeting with the chairmen of
    the political parties.  They decided that on January 22 the
    parliament will conduct a lengthy debate on economic issues, at
    which time PM Geir Haarde will present a report on the economic
    situation.  This did little to sate the assembled protestors, who
    later moved to the Prime Minister's Office and repeated the tactics
    of the previous day.  A tense confrontation ensued when PM Haarde
    attempted to leave the building, as protestors blocked his car from
    leaving and threw eggs and other projectiles at the vehicle.  They
    were finally removed by the PM's security detail.

    ¶5. (SBU) Tensions are very high within the coalition government as
    well as outside government buildings.  Opposition parties have
    strengthened their call for early elections, with Left-Green Chair
    Steingrimur Sigfusson asking the government what other way it might
    have in mind to meet the demands of the nation.  The Social
    Democratic Alliance (SDA), the junior party in the coalition, has
    moved from quiet agitation to near-open rebellion, as the SDA Deputy
    Chair said in a media interview on Jan. 21 that early elections this
    spring are "unavoidable."  On January 21, the Reykjavik Chapter of
    the SDA, the party's largest, will be holding a meeting to discuss
    the coalition with the Independence Party (IP). Many SDA members
    believe that the meeting will pass a resolution calling for early
    elections.  Meanwhile, IP dissatisfaction with PM Haarde is also

    REYKJAVIK 00000012  002 OF 002

    growing, a week ahead of that party's national congress.  Emboffs
    have heard from two IP insiders in the last day that many fear the
    PM is "not doing anything" and that the situation will only get
    worse absent some dramatic action.  The only prominent IP comment in
    the last 24 hours has been the Justice Minister's statement that
    police are ready to deal more harshly with protestors should they
    continue to break the law.

    ¶6. (SBU) Comment:  The January 21 demonstration may have been a
    turning point in the political situation here.  The raw emotion of
    the demonstrations has shocked and unsettled Icelanders unaccustomed
    to open civil strife.  The linkage to the 1949 NATO riots, which are
    seared into Iceland's collective memory, is telling.  The cabinet,
    especially the IP, appears confused as to how to contain the
    escalating disorders.  Coverage of the Prime Minister's embarrassing
    encounters with the protestors has not reassured the public
    regarding his leadership abilities.  Undoubtedly, the government's
    response has been hindered by the absence of Foreign Minister and
    SDA Chair Ingibjorg Solrun Gisladottir, who is in Sweden receiving
    (unexpectedly prolonged) treatment for a brain tumor diagnosed last
    fall.  Without Gisladottir's calm leadership, the SDA is having
    difficulty finding a coherent message.  As the country's new special
    prosecutor investigating last fall's economic collapse begins his
    work this month, reports of corruption in Icelandic business life
    will only fuel popular dissatisfaction.  Absent some bold and
    effective move to release public pressure, the assessment of early
    elections as "unavoidable" may prove to be right.

    VAN VOORST

`