On 10th May the longest ruling Prime Minister in Europe, David Oddsson will stand before the Icelandic electorate for the fourth time running. This island in the far north, Iceland, is unjustly misjudged - a liberal society where the welfare state is powerful - has witnessed exceptional growth over the last few years (more than 4% between 1995 and 1999, 3.1% in 2002). The State budget is a surplus one, government investment is increasing greatly, and unemployment does not exist (1.4% in 2002). This overheated situation has incidentally led to a high inflation rate (6.3% in 2001) and a major current account deficit (7.9% in 2001). The country's economy depends essentially on the sea, with the fishing industry employing 12% of the working population and representing 15% of the GDP and 50% of exports.

The Icelandic Political System

Iceland has the oldest Parliament in the world. The Althing was in fact founded in 930 bringing together a legislative assembly and a court at that time. At the end of the 12th Century its functions were diminished and the Althing became a simple court of justice that was closed in 1800. The Althing was set up as a consultative assembly again in 1843 by the King of Denmark.

The modern day Althing, the only Chamber in the Icelandic Parliament since the disappearance of the Higher Chamber in 1991, comprises 63 elected members for a period that does not exceed four years. Iceland is divided into eight constituencies, the capital Reykjavik representing more than a third of the country. Sixty-two seats are divided into two categories (the 63rd nicknamed the vagabond is attributed according to a method that takes the parties' overall results as well as the distribution between constituencies and political movements into account):

- 54 seats are distributed between eight constituencies, the distribution of the eight remaining seats is determined before each election according to the number of voters on the previous electoral role.

- fifty of the 62 parliamentary seats are elected proportionally according to the highest remainder once the small parties, who have not succeeded in winning two thirds of the quota established for the constituency, have been eliminated. The last twelve, the so- called seats of perequation, are attributed, according to a complex method that takes place in three stages, to the parties that are under represented (but that must absolutely have won 5% of the vote) and to the candidates who are not elected during the first distribution round.

Five political movements are represented in the Althing :

The Independence Party (SSF), the Prime Minister, David Oddsson's Conservative movement;

The Alliance Party (SF), a Social Democrat movement that was born in 1999 after the merger between the Social Democrat Party and the People's Alliance and the Women's Party;

The Progress Party (FSF), a Liberal Party that was the country's second leading political party for a long time and a member of the government coalition since 1995 (SSF-FSF);

The Red Alliance -The Greens (VG), that brings together a militant part of the People's Alliance who refused to merge with the Social Democrat Party;

The Liberal Party (FF), a small Liberal movement

The President of the Republic is elected every four years during a single round election by direct universal suffrage. He enjoys little power. The present President is Olafur Ragnar Grimsson (Alliance Party), elected on 29th June 1996, who started his second mandate in 2000 without having had to put up a fight since no candidate came forward to stand against him.

The Electoral Stakes

Iceland is an exception to the rule where tradition has it that the countries in Northern Europe are the domain of the social democrats. The Independence Party (SSF), a Conservative movement dominates the political arena. The party has ruled (in coalition with other movements) for 44 of the last 58 years. David Oddsson, its leader, has been Prime Minister, since 1991, of a coalition government with the Progress Party (FSF). Differences have emerged recently about the European Union between the leader of the Independence Party and Halldor Asgrimsson, Foreign Affairs Minister and leader of the Progress Party. Whilst the Prime Minister is against Iceland's integration into Europe, Halldor Asgrimsson believes that the future of the European Economic Area (EEA) is gravely compromised and would like to place the question of Iceland's membership to the European Union, on certain conditions, at the heart of political discussions.

But David Oddsson's most serious competitor is Ingibjörg Solrun Gisladottir, member of the Alliance Party (SF), who resigned from her position as Mayor of Reykjavik on February 1st following pressure from her partners in the Progress Party within the Town Council who demanded she choose between her responsibilities as a councillor and her electoral campaign for the general elections. The Social Democrat candidate is openly pro-European.

There is fierce battle going on between the two leaders and the two main political parties in the country.

On 15th April, David Oddsson said quite firmly that there could be no alliance between his party and the Alliance Party. He described the last years of Social Democrat power (during the 1980's) as "catastrophic, that led to a record inflation level and increases in taxes". Opinion polls placed the Alliance Party in the lead in terms of intention to vote at the start of the year, ahead of the Independence Party by just a few points. The latter, that was credited with 44.5% of the vote in November 2002 versus 25.1% for the Alliance Party, had 36.4% of the intention to vote in January 2003 versus 39.7% for its main rival. At present the two movements are running almost neck and neck. According to the last survey that was undertaken at the beginning of April, by the daily Frettabladid, the Independence Party would win 31.3% of the vote versus 31.1% for the Alliance Party. The Liberal Party (FF) would win 10.5% of the vote, the Progress Party (FSF) 8.9% and the Red Alliance-the Greens 8%. The Liberal Party might therefore replace the Progress Party within the possible government coalition led by the Independence Party.

David Oddsson is of course able to demonstrate some good results of his last four years in power but the Icelandic electorate might also show a desire for change. Indeed although the two main political movements are running neck and neck, Ingibjörg Solrun Gisladottir of the Alliance Party the main opposition party, is ahead of David Oddsson as candidate for the post of Prime Minister in all of the opinion polls.

Participation : 84.1%

Source Icelandic Embassy in Paris