Iceland election is 3rd in 4 years

Filling seats in Parliament complicated by plethora of parties

REYKJAVIK, Iceland — Icelanders went to voting booths Saturday to pick a new Parliament for the third time in four years, in an election that has seen the ruling center-right defend its economic record and the opposition call for greater public spending after years of fiscal restraint.

Whichever party emerges on top is not guaranteed a place in the government, since both likely will need to form broad coalitions to obtain a majority of seats in Parliament.

Political analysts say the most likely outcome eventually is a coalition government led by Katrin Jakobsdottir of the Left Green Movement. The 41-year-old Jakobsdottir holds a graduate degree in Icelandic literature and would be among the world’s youngest leaders.

About 245,000 people were eligible to vote in the small country in the North Atlantic.

“I’m optimistic about a good outcome tonight,” said Prime Minister Bjarni Benediktsson, who leads the Independence Party, as he voted Saturday. But “it’s clear that the situation is tricky” with so many parties contesting, he said.

The election comes at a crucial juncture for the Icelandic economy, which is showing signs of a slowdown after its long and now booming recovery from the financial crisis. Much of the debate has centered on the need to rebuild the country’s infrastructure and on how to avoid another round of financial instability.

“Soft landings have not been our strong side in the past, so I will allow myself limited optimism,” said Gylfi Magnusson, an economist at the University of Iceland.

The election is taking place because the ruling coalition collapsed after just nine months in office after revelations that the prime minister’s father had vouched for the character of a convicted child molester. Another early election was held a year ago, when then-Prime Minister Sigmundur David Gunnlaugsson was forced to resign in the face of yogurt-hurling protesters after being embroiled in the so-called Panama Papers scandal. In the 2013 vote, the center-right took control of government from the center-left after capital controls were imposed in the wake of the country’s banking crisis.

After casting her ballot in Reykjavik early Saturday, Jakobsdottir acknowledged the momentum of the Independence Party in the face of scandal.

“Icelanders when they are voting are not thinking about these issues, they are thinking more about economics,” she said an interview. “I think also that the voters of the Independence Party are very loyal compared to other parties.”

Regardless of who wins it’s likely to be “a complicated situation,” she said. “We have seven parties in this last year in Parliament and there might be even more after this election.”

Asked whether she could foresee a broad coalition across the political spectrum, Jakobsdottir said that her “first choice” would be a “left and center” government.

A booming tourism industry, now the country’s biggest export, and a general improvement in the global economy helped Iceland achieve a growth rate of 7.4 percent in 2016. After expanding for seven years running, the central bank is now expecting GDP to grow at 5.2 percent this year. With most capital controls now having being removed, the financial system no longer poses “significant systemic risks,” Sedlabanki said in its most recent report.

Inflation also has been subdued, allowing for interest-rate cuts and rising disposable incomes.

Benediktsson has vowed to cut taxes and invest in infrastructure.

“We have to defend the rise in purchasing power and maintain economic stability,” he told state broadcaster RUV on the campaign trail.

The Left Greens want to raise taxes on the rich to help finance increased public spending on infrastructure, health and education.

“Despite the economic boom, care for societies’ basic infrastructure has been left behind,” Jakobsdottir said, promising to increase taxes on the financial sector to fund new social policies.

Offering the counter view is the unorthodox Center Party, which promises to windfall “every Icelander” with government-owned bank stocks.

Iceland, which was declared a sovereign state under the Danish crown in 1918, will celebrate a century of self-rule next year. At the same time, it will mark 10 years since the International Monetary Fund rescued the country’s finances.