After 18 years of neoliberal governments dominated by the Icelandic Independence Party, the Socialist Alliance on 27 per cent and the Green Left Movement on 21 per cent now have an absolute majority in parliament.
The Socialist Alliance was formed as a result of the Women's Party and other left parties merging during the 1990s. Those who rejected the merger created the Green Left Movement and the biggest gains in April's General Election, forced by street protest, were made by the Green Left. The ecosocialist Green Left are part of Europe's Nordic Green Alliance, a group of Communist and other Left parties, rather than European Green parties.
The left victory should be celebrated for a number of reasons. The Green Left have gained at the expenses of the rightwing free market parties because of their proud record of pointing out the risks of failing to regulate the banks and relying on finance capital. They and the Socialists are keen to diversify the Icelandic economy and to make sure that finance capital is no longer king. Both ruling parties believe in raising income tax on higher earners and are pledged to preserve workers rights and the Icelandic welfare state. The victory has also delivered the world's first openly lesbian prime minister.
The Green Left are also hostile to NATO and are keen to maintain a demilitarised Island. There are number of big challenges for the coalition government. The Socialists are keen to fast-track Iceland into the European Union. The Green Left are, in contrast, eurosceptics who see the EU as a capitalist club. All parties are worried that Iceland's reputation as the most sustainable fishing nation in Europe, with relatively successful policies to conserve cod, could be destroyed by entry into the EU's common fisheries policy.
The economic crisis remains severe and essentially the far from green or socialist IMF is in control. Although the coalition insist they will not cut welfare, the IMF have insisted that interest rates, currently at an astonishing 17 per cent, remain high and that vigorous efforts are made to cut spending.
Environmental policies that the Green Left held in opposition seem to be less apparent in victory. Much to everyone's surprising the Green Left fishing minister has upheld whaling quotas, which means despite a green coalition government, Iceland remains Europe's only whaling nation.
According to Saving Iceland, a coalition that has been taking non-violent action to protect the island, a key signal of where the country is likely to go will be a decision whether to give the go ahead to a controversial aluminum smelter. Jaap Krater from Saving Iceland notes 'The left greens have not done as well as they hoped for. What has been more disappointing, they have supported putting public money into construction of a new Century Aluminum smelter just south of Reykjavik, because Century had difficulty financing the project. It is also noticeable that one of the more vocal opponents of the aluminum industry, Kolbrún Halldórsdóttir, has been ousted. Perhaps she was too much of a genuine environmentalist.'
So far from being Europe's Cuba; a plucky ecosocialist island, resisting neoliberalism, the coalition may have relatively little space to resist continued neoliberal policies. Margaret Wright, a Green Party councilor from Cambridge and a member of the Green party's International Committee, visited Iceland during the election and is far more optimistic:
'At a meeting with Ögmundur Jónasson, re-elected member of the Red/Green Group, I heard the classic case Greens make against EU membership - free trade, conventional economic growth, potential militarisation, centralisation and loss of regional autonomy. I also heard the priorities of the Red/Greens as they enter government. They included
*the upgrading and protection of the welfare state, which long years of rightwing rule have undermined;
* protection of natural resources and the environment, ownership of Iceland's resources which are currently in danger of falling into other's hands;
* a diversified economy, sustainability, democracy and gender equality;
* military non-alignment with withdrawal from NATO.'
Across Europe, Green parties and the left have been swept into coalition governments over the last decade, with often mixed results. Typically the German Greens stoutly resisted the Iraq war, prevented Germany from sending troops and halted nuclear power but supported free market economic policies and the war in Afghanistan.
Maybe the Icelandic left government should look to Latin America for a better model for resisting neoliberalism and creating social transformation. For the rest of us in Europe, we should give two cheers and what solidarity we can but should not let up in calling for Iceland to pursue green left policies ranging from opposition to whaling to a rejection of IMF control. However according to Jaap Krater, 'Hopefully Icelandic people that woke up due to the economic crisis will not now fall asleep, and will demand an end to these projects
that do not make environmental or economic sense.'