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### Viewing cable 09REYKJAVIK61, ICELAND: THE PROGRESSIVE PARTY -- AN OVERVIEW

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09REYKJAVIK61 | 2009-03-25 16:04 | 2011-01-13 05:05 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Reykjavik

`

    VZCZCXYZ0012
    RR RUEHWEB

    DE RUEHRK #0061/01 0841654
    ZNR UUUUU ZZH
    R 251654Z MAR 09
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC 4032
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
    RUEAIIA/CIA WASHDC

` `

    UNCLAS REYKJAVIK 000061

    SIPDIS

    SENSITIVE

    STATE FOR EUR/NB, INR-Bio

    E.O. 12958: N/A
    TAGS: PGOV PREL PINR IC
    SUBJECT:  ICELAND: THE PROGRESSIVE PARTY -- AN OVERVIEW

    ¶1.  (U) Summary:  The traditionally agrarian Progressive Party is
    looking to the 2009 elections as a chance to reclaim lost glory and
    its historical role as the deciding factor in governing coalitions
    on both ends of the political spectrum.  The party -- Iceland's
    second-largest for most of the last century -- suffered mightily at
    the polls in 2006 and 2007 from perceptions of cronyism and
    corruption. Support has decreased still further since then despite
    attempts to modernize the party, which seem to have widened internal
    disputes rather than overcome them. Four chairmen in three years
    have not managed to bring the disagreements to a close, but many are
    hopeful that a new young chairman can finally unify the party. The
    party is pro-NATO and until recently was against, or at best
    ambivalent towards, the EU, but has shifted more to a pro-EU
    platform in the last few months. The PP is currently defending the
    Social Democratic Alliance/Left-Green Movement minority coalition
    and claims to prefer a leftist government after the upcoming
    parliamentary elections. End Summary.

    ¶2.  (SBU) The Progressive Party (PP) was established in 1916. For
    most of the twentieth century it was the second largest party in
    Iceland, but its poll numbers have slipped in recent years. The
    constituency is largely rural and agrarian, closely connected with
    the cooperative movement in Iceland. The PP has frequently played a
    kingmaker role, given the inability of any one party to win an
    outright majority on its own. Icelanders describe the party as "open
    at both ends" because of its ability to form coalitions on both the
    left and right of the political spectrum.

    ¶3.  (SBU) Former party leader Halldor Asgrimsson (1994-2006), who
    was Prime Minister in the IP-PP coalition from 2004-2006, attempted
    to modernize the party and increase its appeal to urban voters, but
    he proved mostly unsuccessful in this endeavor. Asgrimsson stepped
    down as chairman of the party after the municipal elections in May
    2006 when the PP suffered its second-worst electoral outcome ever.
    The party was also embroiled in discord between the rural and
    agrarian component of the party -- led by Deputy Chair Gudni
    Agustsson -- and the urban faction associated with Asgrimsson.
    Asgrimsson bypassed Agustsson when he handpicked technocrat Jon
    Sigurdsson for the chairman position. This only further complicated
    intra-party arbitration, and Sigurdsson did not succeed in settling
    the disagreements in the party. Sigurdsson led the PP through the
    2007 parliamentary elections where it suffered its worst outcome in
    any parliamentary elections, receiving only 11.7 percent of the
    national vote.

    ¶4.  (SBU) In the 2007 campaign, the Progressives were hamstrung by
    the public's perception that the party was rife with cronyism that
    was just shy of outright corruption.  In what became an emblematic
    case, about a month before the election the Althingi granted
    Icelandic citizenship to the soon-to-be daughter-in-law of Minister
    of Health Jonina Bjartmarz under circumstances in which political
    connections seemed to many to be the deciding factor.  Given its
    command of the Ministry of Industry and Commerce, the party also
    took the brunt of controversy over expansion in the aluminum sector
    and resulting environmental concerns.  Many Progressives complained
    that somehow their coalition partner, the Independence Party, reaped
    all the credit for Iceland's booming economy while the PP was left
    to take the blame for unpopular side effects of the expansion.  The
    party was hammered on Election Day, dropping from 12 Althingi seats
    to seven and failing to win a single seat in the Reykjavik district.
     Though the IP-PP coalition still held a one-seat majority, IP Chair
    Geir Haarde chose instead to build a larger majority with the Social
    Democratic Alliance, leaving the Progressives out in the cold.

    ¶5.  (U) Sigurdsson resigned as chairman after the elections and was
    replaced by Deputy Chairman Gudni Agustsson. This opened a window of
    opportunity for Agustsson to guide the party back to its traditional
    roots to try to regain some of the recently lost support. Agustsson
    was ineffective at unifying the broken party and the PP did not
    bounce back in opinion polls. In November 2008, he resigned suddenly
    from the position of chairman after a bitter central committee
    meeting at which the party's youth wing made clear its unhappiness
    with his leadership. Deputy Chairman Valgerdur Sverrisdottir headed
    the party until the January 2009 party national congress where the
    party elected a new leadership.  Sverrisdottir herself did not seek
    election as chairman and when early elections were called for April
    2009 announced that she would be retiring from politics.

    ¶6.  (U) The national congress was historic for two reasons. First,
    an outsider was elected chairman of the party for the first time,
    namely 34-year-old Sigmundur David Gunnlaugsson, who had joined the
    party only one month earlier.  Though Gunnlaugsson's father had
    represented the party in parliament in the 1990s, Gunnlaugsson had
    no prior political experience. Second, the PP resolved at the
    congress to support starting accession negotiations with the
    European Union (EU) given certain preconditions.

    ¶7.  (SBU) During the January public demonstrations in Iceland when
    the majority coalition was teetering on the brink of collapse, the
    PP, under the leadership of new chairman Gunnlaugsson, informed the
    Social Democratic Alliance (SDA) and the Left-Green Movement (LGM)
    that if they were to form a minority coalition, then the PP would
    defend it. On February 1, the SDA and LGM did indeed form a minority
    coalition government and the PP pledged to defend it against
    no-confidence motions in the Althingi. For the first few weeks after
    the new chairman was elected, the party surged in the polls, at
    times measuring at over 20 percent. Support has started to dwindle
    since then as the party has struggled at finding the balance between
    defending the government -- and therefore bearing some of the cost
    of unpopular decisions -- and not having any direct influence over
    the SDA-LG coalition's policies.

    ¶8.  (SBU) Gunnlaugsson's lack of experience in the political arena
    is also raising doubts. The new party chair has in recent statements
    all but excluded cooperation with the Independence Party after the
    elections, but then in mid-March has also harshly criticized the SDA
    for not being a "real" party and called the SDA's credibility into
    question.  At the same time, Gunnlaugsson's praise for the LGM has
    bordered on the saccharine, something of a break from tradition for
    the centrist Progressives. Some believe that although the party
    appears to be courting leftist elements, this could be a political
    ploy and the PP could go back to its kingmaker role again, joining
    either the center-right or the center-left forces in parliament.

    ¶9.  (SBU) On foreign affairs the PP is pro-NATO, and took on a more
    modern view on western defense cooperation under Asgrimsson, with
    Icelandic participation in peacekeeping and post-conflict
    reconstruction efforts. The party had advocated U.S. withdrawal from
    Naval Air Station Keflavik in the (unspecified) long term, but
    Asgrimsson had personally favored a U.S. presence and expressed his
    personal feelings of betrayal in the harshest terms.  While the
    party had traditionally been anti-EU, Asgrimsson attempted to sway
    the party to a more EU-friendly position and had scandalized many in
    2006 with a prediction that Iceland would become a member by 2015.
    Subsequent chairmen have all been pro-EU with the exception of the
    traditionalist Agustsson. Their efforts to move the party in the
    direction of Europe eventually came to a head at the national
    congress in January where the party decided to drastically modify
    its position and stated its preference for starting negotiations
    with the EU. That said, Chairman Gunnlaugsson's position on the EU
    can best be described as "open" to EU membership rather than as
    advocacy.  He is otherwise something of a tabula rasa on foreign
    policy issues.

    VAN VOORST

`