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### Viewing cable 07REYKJAVIK139, ICELAND: GOVERNING COALITION NEEDS AN ELECTION-EVE MIRACLE

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07REYKJAVIK139 | 2007-05-11 17:05 | 2011-01-13 05:05 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Reykjavik

`

    VZCZCXRO2878
    PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
    RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
    DE RUEHRK #0139/01 1311743
    ZNR UUUUU ZZH
    P 111743Z MAY 07
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC PRIORITY 3293
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

` `

    UNCLAS SECTION 01 OF 02 REYKJAVIK 000139

    SIPDIS

    SIPDIS

    SENSITIVE

    E.O. 12958: N/A
    TAGS: PGOV IC
    SUBJECT: ICELAND: GOVERNING COALITION NEEDS AN ELECTION-EVE MIRACLE
    TO CONTINUE

    Refs: A) Reykjavik 127

     B) Reykjavik 125
     C) Reykjavik 114

    ¶1. (U) Summary:  In the final days before Iceland's May 12
    parliamentary elections, highly volatile poll data has shown drastic
    changes in party support.  The Progressive Party is polling higher
    than it has for months, while the Left Greens are losing the
    momentum they had been gaining over the past year.  The margins are
    slim enough that the prospects for the current government's hold on
    power vary from poll to poll.  Prominent analysts have declared that
    voters will essentially be putting the current government's economic
    policies on trial.  A plurality of voters would prefer to see the
    same government on May 13, but popular distaste for the Progressives
    stands a good chance of forcing PM Haarde's Independence Party into
    coalition with the Social Democratic Alliance.  End Summary.

    ¶2.  (U) Gallup started releasing daily polling data on May 7 ahead
    of the May 12 elections to the Althingi (parliament).  The most
    recent results (May 10) were as follows:

    Percentage of voters expressing a preference (Gallup):

    Independence (IP):    36
    Social Democratic Alliance (SDA): 26
    Left-Green (LG):    16
    Progressive (PP):    14
    Liberal (LP):     7
    Iceland Movement (IM):    2

    Undecided/no preference stated:  11 percent of respondents.

    ¶3.  (U) Compared to Gallup and Frettabladid polling data two weeks
    ago (Ref. A), the IP's support is dwindling somewhat, in keeping
    with its history of scoring higher in the polls than on Election
    Day.  The PP is now rising faster than it has for months, polling at
    14 percent, having gained about four percent in two weeks.
    Historically, the PP, in contrast to the IP, always fares better in
    elections than in opinion polls.  Support for the Left-Greens, which
    peaked several weeks ago, is now measuring 16 percent.  This is
    consistent with past pre-election indicators, where the LG tends to
    steadily lose voter support shortly before elections.  The SDA is
    now winning back the support that it earlier lost to the Left
    Greens, as more and more voters may be realizing that the Left
    Greens would be an uneasy partner in a coalition government.  In
    contrast, voters may be catching on to the idea that the SDA's
    center-left policy could be more amenable to the IP, were these two
    parties to form a government.

    ¶4.  (U) Both Independence and the Progressives are hoping that
    voters' general happiness with their standard of living will
    translate into support on election day.  A May 7 Frettabladid poll
    showed that more than one third of the electorate would like the
    current coalition government to stay in power, which is an increase
    of eight percent since late April.  Other possible coalitions fared
    considerably worse:  twenty percent of voters prefer a
    left-of-center government that would consist of the Social
    Democratic Alliance and the Left Green Movement, while about 15
    percent favor an IP-SDA government and approximately nine percent
    fancy an IP-LG coalition.

    ¶5.  (SBU) Comfort with the current coalition aside, two days away
    from the elections, results differed from one poll to the next about
    whether the current IP-PP government will lose or maintain its
    majority.  The most recent Gallup poll shows the current IP-PP
    coalition with a slim one-seat majority, but polls by Frettabladid
    and Bladid on May 10 and 11 both show the government losing its
    majority.  Prominent PP members, such as Foreign Minister Valgerdur
    Sverrisdottir and Minister of Agriculture Gudni Agustsson, have said
    that the party needs greater support in order to be able to stake a
    claim to extend its partnership in the current coalition.  Agustsson
    stated that the party needs to get 17-20 percent for this to happen.
     (Comment:  This would be an amazing last-minute turnaround, even
    for the Progressives.)

    ¶6.  (U) As a result, a number of political observers and pundits now
    predict an IP-SDA coalition.  They think that in order for Icelandic
    politics not to become stagnant a new coalition must take over the
    reins.  The PP's following has, moreover, dwindled to such an extent
    that it would not have a legitimate place in government.  The
    observers also note that there are not as many ideological
    differences between the IP and the SDA as there would be in an
    Independence/Left-Greens coalition.  An IP-SDA coalition would be a
    robust one in parliament and reminiscent of the so-called
    Resurrection Government (Vidreisnarstjorn)--that consisted of the IP
    and the Social Democratic Party, one of the forerunners to the
    SDA--and was in power from 1959-1971.  The Resurrection Government
    has, in fact, been called one of the two "islands of stability" in
    Icelandic politics, the other one being the current IP-PP coalition
    that has been in power since 1995.

    REYKJAVIK 00000139  002 OF 002

    ¶7.  (SBU) Comment:  Voters are not awed by the ongoing election
    campaign, which many characterize as lackluster.  Environmental
    protection has virtually disappeared from the campaign over the last
    week continuing the trend since the March 31 Hafnarfjordur
    referendum (Ref. A).  A lack of disagreement on election issues in
    general has enabled the IP and PP to champion the vibrant economy
    and the high standard of living, which has been achieved under the
    current coalition, without much resistance from the opposition.  The
    biggest problem for the Independence Party is that voters are tired
    of the Progressives, who despite their late run but may not draw
    enough support to keep the government in power.  Absent a
    Progressive miracle, Prime Minister Haarde (Independence) will be
    searching for a new coalition partner come May 13.  He may find that
    the Social Democratic Alliance offers a smaller ideological gap to
    bridge than his other potential partners.  End Comment.

    VAN VOORST

`