Iceland has a right-wing government following more than two months of negotiations. The 330,000 nation has been unable to form a government since the country went to the polls on October 29.
The three-party coalition includes the first Independence Party (21seats), the liberal Restoration Party (7), and the Socio-Liberal Bright Future Party (4). The three parties control 32 seats in a 63-seat legislature, a thin majority that will hang in the balance.
The Prime Minister will be the Independence Party leader Bjarni Benediktsson. Although he was implicated in the Panama Papers scandal, like the former Prime Minister and leader of his party Sigmundur David Gunnlaugsson, he managed to land politically on his two feet.
The leader of winning Restoration Party, Benedikt Jóhannesson, will become Minister of Finance and Óttar Proppé, leader of Bright Future, will become Minister of Education.
The Independence Party secured 29% in October, convincing voters that Iceland is on track to economic recovery. Indeed, with record numbers of tourists, 3% unemployment, and 4,3% GDP growth for 2016, that narrative appears convincing.
The leader of the Pirates Party, Asta Helgadottir, told the Financial Times that “it is, of course, an awkward situation that we will have another prime minister that was listed in the Panama Papers . . . I am not optimistic about the future of this government.”
Catalytic for the formation of a government was an agreement to debate a referendum on EU membership in parliament. That was a token concession, given that most parties in the Icelandic parliament oppose EU membership. The country applied in 2009 but withdrew its application in 2013.