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### Viewing cable 07REYKJAVIK142, ICELAND ELECTIONS: GOVERNMENT CLINGS TO MAJORITY, BUT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07REYKJAVIK142 | 2007-05-14 14:02 | 2011-01-13 05:05 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Reykjavik

`

    VZCZCXRO4439
    OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
    RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
    DE RUEHRK #0142 1341425
    ZNR UUUUU ZZH
    O 141425Z MAY 07
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 3300
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

` `

    UNCLAS REYKJAVIK 000142

    SIPDIS

    SIPDIS

    SENSITIVE

    E.O. 12958: N/A
    TAGS: PGOV IC
    SUBJECT: ICELAND ELECTIONS: GOVERNMENT CLINGS TO MAJORITY, BUT
    COALITION TALKS ON AWKWARD FOOTING

    Refs: A) Evans-State Ops Phone calls 5/13 and 5/14

     B) Reykjavik 139 and previous

    ¶1. (U) Summary:  Iceland's governing coalition hung on to a one-seat
    parliamentary majority in national elections on May 12.  However,
    the junior partner in the coalition is sufficiently weakened -- with
    its chairman and another sitting minister failing to get elected --
    that the coalition's survival is by no means a sure thing.  While
    talks continue, Prime Minister Haarde's Independence Party is
    putting out feelers to other possible partners.  End Summary.

    ¶2.  (U) The final results from Iceland's nationwide Althingi
    (parliament) elections on May 12 are as follows:

    Party   Percent of votes Seats (change)

    Independence (IP):   36.6 25 (+3)
    Social Dem. Alliance (SDA): 26.8 18 (-2)
    Left-Green (LG):   14.3  9 (+4)
    Progressive (PP):   11.7  7 (-5)
    Liberal (LP):    7.3  4 (0)
    Iceland Movement (IM):   3.3  0

    Thirty-two seats are required to hold a majority in the 63-seat
    Althingi.  The new Iceland Movement failed to win a seat as it did
    not cross the five percent threshold.  Turnout was 83.6 percent,
    down from 87 percent in the last Althingi elections in 2003.

    ¶3.  (U) With these results, the governing Independence-Progressive
    coalition holds a one-seat majority in the Althingi despite coming
    out with less than 50 percent of the national vote.  The IP made
    significant gains and added three seats to its tally, helping to
    offset the Progressives' losses.  The results were extremely tight
    throughout the night of May 12-13, with initial reports indicating
    that the government had lost its majority only to have that trend
    reversed as the night wore on.  (Indeed, daily newspaper
    Frettabladid wound up with a "Dewey Defeats Truman" moment as its
    first printing ran with the headline of "Government Falls After
    Progressives' Collapse.")  The fate of individual members of
    parliament was also very much in question, as it only became clear
    when the final vote tally was announced mid-morning on May 13 that
    Progressive Chairman and Minister of Industry Jon Sigurdsson had not
    been elected to a seat in the Althingi.  Two other Progressive
    ministers were also in jeopardy, with the Minister of Environment
    failing to retain her seat and the Minister of Health squeaking in
    at the last minute.

    ¶4.  (SBU) Prime Minister Geir Haarde (IP) was initially optimistic
    about continuing the coalition, stating that he "saw no need for
    immediate changes" to IP-PP cooperation.  As May 13 wore on,
    however, it became evident that the Progressives were unsure about
    continuing as the ever-more-junior partner in the government.
    Sigurdsson was noncommittal in a television appearance with other
    party leaders on the evening of May 13, only allowing that
    "discussions are taking place" with the IP and that the two parties
    will keep talking.  In the meantime, IP doubts have apparently grown
    about the reliability of the Progressives as part of a one-seat
    majority -- an IP insider noted to PolOff that one newly-elected PP
    Althingi member had "said things that [PP Chair Sigurdsson] should
    have told us himself in private" on a post-election talk show,
    raising questions about the stability of a continued IP-PP
    partnership.

    ¶5.  (SBU) While failing to defeat the governing coalition directly,
    the left-leaning SDA and Left-Green parties are simultaneously
    courting the Progressives (in the hopes of a three-member
    center-left coalition) and the Independence Party.  The odds of a
    center-left government look slim given that the SDA and LG both made
    industrial/environmental policy their centerpiece issues, attacking
    the Progressives directly.  Both leftist parties seem to believe
    that their chances of getting into power lie more with the
    Independence Party, and their party leaders have been careful to
    keep all options open in their public statements.  That said,
    leading newspaper Morgunbladid (traditionally close to the IP)
    reported on May 14 that SDA leader Ingibjorg Solrun Gisladottir had
    shown a fair degree of arrogance in her contacts with the IP thus
    far, which if true would do little to soften the personal aversion
    that many in the IP have towards her.

    ¶6.  (SBU) Comment:  By virtue of its strong performance in the
    elections and the public's overwhelming confidence in PM Haarde,
    Independence is largely in the driver's seat.  The challenge for
    Haarde will lie in finding a coalition partner that will not overly
    disrupt the IP's agenda while at the same time giving the coalition
    the strength it needs to survive.  With an already-weakened
    Progressive Party doing little to strengthen IP confidence in the
    idea of a one-seat majority, prospects for an IP pairing with the
    Social Democrats or Left-Greens are on the rise.

    VAN VOORST

`