Iceland forms new coalition govt with focus on inflation and EU referendum by 2027

Iceland’s Social Democratic Alliance on Saturday presented a three-party coalition government, vowing to stabilise the economy after emerging as Iceland’s biggest party in November’s elections.

The Social Democratic Alliance beat out the governing Independence Party to win the snap election, called after the left-right coalition collapsed in October over divisions on the handling of immigrants and asylum seekers.

Frostadottir’s centre-left Social Democratic Alliance became the biggest party in a snap election on Nov. 30, and has agreed to form a coalition government with the centrist People’s Party and the left-leaning, pro-European Reform Party, RUV said.

Thorgerdur Katrin Gunnarsdottir, leader of the Reform Party, will be minister of foreign affairs, it added.

It will be the first time in Iceland that the leaders of all the governing parties will be women, and the first time that the country will have a female prime minister and a female president – Halla Tomasdottir – simultaneously, the broadcaster said.

More from World

Nepal's new PM pays homage to people died during the Gen Z protest in her first national address This Week in Explainers: How recovering from Gen-Z protests is a Himalayan task for Nepal

A live stream from RUV showed the leaders of the three coalition parties hugging after they signed an agreement on forming a government.

Frostadottir, 36, will be the youngest prime minister in Icelandic history, RUV said.

The new coalition replaces a government by Bjarni Benediktsson’s conservative Independence Party which came second in the election, called after coalition disagreements and public discontent over migration and energy and housing issues.

The new government plans to focus on bringing down inflation and interest rates, and aims to reduce the number of ministries by one in order to cut administrative costs, RUV reported on Saturday, citing Frostadottir.

Impact Shorts

More Shorts

‘The cries of this widow will echo’: In first public remarks, Erika Kirk warns Charlie’s killers they’ve ‘unleashed a fire’

Trump urges Nato to back sanctions on Russia, calls for 50–100% tariffs on China

It also plans to formulate a parliamentary resolution to put the question of EU membership to a referendum, which the governing parties said they hope will take place no later than 2027, according to RUV.

The new government also intends to set up a panel of independent experts to assess the advantages and disadvantages of retaining the Icelandic crown compared to adopting the Euro currency.

The Independence Party of outgoing Prime Minister Bjarni Benediktsson came second in the election, with 19.4 percent of the vote and 14 seats, its worst ever showing.

In third place was the Liberal Reform Party with 15.8 percent and 11 seats, while the People’s Party earned 13.8 percent and 10 seats.

With inputs from agencies.