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Centre-right opposition wins Iceland election
April 29, 2013
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REYKJAVIK: Iceland’s centre-right opposition stormed back to power, final election results showed on Sunday, marking a spectacular comeback for a coalition ousted in 2009 after presiding over the country’s near bankruptcy.

Voters from the small North Atlantic nation, fatigued after four years of austerity imposed by a leftist government, handed power to the right-wing Independence Party and the centrist-agrarian Progressive Party, results showed.

A final count of nearly 194,000 valid votes cast showed the Independence party won the popular vote with 26.7 per cent, giving it 19 seats in parliament.

“We are ready to lead the government,” the party’s 43-year-old leader, Bjarni Benediktsson, said in a televised debate, adding his was the party “with the most votes.” Benediktsson was expected to seek a government with the support of the Progressive Party, which got 24.4 per cent of the vote and also 19 legislative seats.

But leftist rivals claimed the leader of the resurgent Progressive Party was more likely to be tasked with forming a government.

“The president will talk to each leader, that is the custom. A lot of things point to the Progressive Party getting the first opportunity,” said Social Democratic Alliance leader Arni Pall Arnason.

The Progressive Party leader himself, Sigmundur David Gunnlaugsson, would only say it was “up to the president to decide” who would form a government.

Negotiations to form a coalition could last several days.

The centrist party was punished at the polls in 2009 for its role in the financial deregulation that preceded the collapse of Iceland’s banking system.

But support soared after a European court ruling this year vindicated the party’s refusal to reimburse British and Dutch savers at failed online bank Icesave.

The opposition victory could also spell the end of EU membership negotiations, as both parties are in favour of halting Iceland’s bid.

But that issue took a backseat to Icelanders’ falling spending power and sliding living standards.

Before the crisis, the mortgages offered by Icelandic banks were linked to inflation, resulting in spiralling borrowing costs for homeowners when the krona collapsed against other currencies.

After four years of tax hikes and austerity designed to meet international lenders’ demands, the Independence Party offered debt-laden voters tax credits.

The Progressive Party promised to go even further by asking banks to write off some of the debt.

President Olafur Ragnar Grimsson said on Sunday he had met outgoing Prime Minister Johanna Sigurdardottir to accept her resignation.

Agence France-Presse

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