Saving Iceland

Iceland’s government’s majority in parliament stands and falls with one particular parliament member from the Left Green party (VG), Guðfríður Lilja Grétarsdóttir, who is strongly opposed to the planned triple damming of Lower Þjórsá river. This became clear last week, on April 13th, when a motion of no confidence, proposed by the right wing conservative party (Sjálfstæðisflokkurinn), was discussed in parliament.

Since the current government was formed – first as a minority government after the protests that lead to the government collapse in January 2009; then as a majority government following parliamentary elections in the spring same year – a certain leftist core of the Left Greens has repeatedly weakened its position, claiming that it lacks real left policies concerning the banks, the situation of Iceland’s homes and the International Monetary Fund to name a few examples. Two MP’s from this core recently decided to leave the party group due to these reason and last week the third one followed. A rumor says that these three are about to start a new political party, presumably more to the left.

Environmental issues also play a big role in the instability of the government, which is made of the Left Greens and Samfylkingin, a social-democratic party that was also in government with the conservatives from 2007 until its toppling in January 2009. Samfylkingin has played friendly with the aluminium industry and addressed what its members claim to be the need for at least one more aluminium smelter to “rebuild” Iceland’s economy. This one smelter has up until now been supposed to be built in Helguvík, on the country’s south west corner, but that project has been on hold for years due to energy dilemma (read about it here).

During the parliament discussion on Wednesday, the above-mention Left Green MP Grétarsdóttir, stated her full opposition towards Landsvirkjun’s plans to build three dams in lower Þjórsá river – a statement that clearly can be understood as a threat: The government stands and falls with the outcome of the Þjórsá conflict (read about the conflict and its connection with Helguvík here). Bjarni Benediktsson, the head of Sjálfstæðisflokkurinn, said that this clearly shows that not only is the government’s position very weak but is also based on one MP’s opinions on the dams. This must be a worry to all players of the economy, said Benediktsson.