Social Democrats overtake PM's party in Iceland elections: What's next?

Iceland’s Social Democratic Alliance surged to victory in a snap election, overtaking Prime Minister Bjarni Benediktsson’s Independence Party, and ushering in uncertainty as parties begin negotiations to form a new coalition government.

Led by Kristrun Frostadottir, the Social Democrats won 20.8 per cent of the vote, securing 15 seats in the 63-seat parliament — more than doubling their 2021 result. The Independence Party fell to 19.4 per cent, its worst performance ever, with just 14 seats.

The election was triggered by the collapse of Benediktsson’s three-party coalition in October, following discord over immigration policies. Collectively, the coalition parties saw their vote share plummet from over 54 per cent in 2021 to less than 30 per cent, reflecting widespread public dissatisfaction.

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“We obviously see that people want to see changes in the political landscape,” Frostadottir said as results were announced.

Path to a new government

Forming a majority government will now require complex negotiations. Iceland’s political culture does not follow traditional left-right divisions, making coalitions unpredictable.

Political analysts point to a potential alliance between the Social Democrats, the Liberal Reform Party, which finished third with 15.8 per cent, and the People’s Party, which garnered 13.8 per cent.

Such a coalition would give them the required majority and align their shared interest in revisiting Iceland’s stalled EU accession talks, last discussed in 2013.

“The main message from the voters this time, is that they punished the government parties– all three government parties– quite considerably,” Olafur Hardarson, professor of political science at the University of Iceland, said.

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Voter priorities

While immigration policies led to the government’s collapse, the issue ranked low among voters, according to polls. Instead, healthcare, housing, and economic concerns dominated public priorities, reflecting growing unease in a country battling inflation and high interest rates.

What’s at stake?

A new coalition could bring significant shifts in Iceland’s policy direction. The Social Democrats have signaled interest in EU talks, while the Independence Party has traditionally opposed accession. Frostadottir faces the challenge of balancing her party’s progressive platform with the priorities of potential coalition partners.

With no party able to govern alone, Iceland’s next government will likely reflect a broad coalition compromise. Talks are expected to intensify in the coming weeks, as leaders navigate the fractured political landscape.

“We’re entering a phase of intense negotiation,” said Eirikur Bergmann, a politics professor at Bifrost University. “The election has reshaped the political scene, and the formation of the next government will define Iceland’s path forward.”

With inputs from agencies