Social democrats to lead new Icelandic government

By Jordan Shilton
31 January 2009

Iceland’s Social Democratic Alliance is to lead the country’s new government in coalition with the Left Green Party, following negotiations between the parties this week. The coalition will receive parliamentary support from the Progressive Party, giving it a total of 34 MPs out of 63 in parliament, a slim majority.


The coalition takes over from the Independence party-Social Democrat coalition, which collapsed last Monday amid mounting protests at the social crisis brought on by Iceland’s economic crisis. Elections could now be brought forward from the May 9 date previously suggested by outgoing Prime Minister Geir Haarde in a bid to placate public anger.


Elections are expected to see the Independence Party and the Social Democrats lose votes. Polls indicate that support for the Social Democrats has dropped by 10 percent since the start of the crisis. The Left Green Party is predicted to become the largest party in parliament.


While the Left Greens were the only parliamentary party to show support to the demonstrations that have taken place regularly since the economic collapse, they will not offer any alternative. Party leader Steingrimur Sigfusson has already indicated that his main priority is bring an end to “political instability” as quickly as possible, hence its coalition with the Social Democrats.


Such an alliance is not surprising when considering the party’s origins. The Left Greens were formed in 2000 when a number of MPs, opposing moves to unite four center-left parties to form the Social Democratic Alliance, split away to form their own party. Since its inception, the Left Greens have been based on various forms of single issue and identity politics, such as environmentalism and feminism. The Social Democratic Alliance was heavily influenced by the so-called “third way” promoted by Tony Blair and New Labour in Britain and the Social Democrats in Germany, which claimed that the free market could be utilized to the benefit of all.


As the Social Democrats and Left Greens negotiated the terms for their coalition, a clear warning was delivered to the incoming government from international financial circles of what was expected of them. International ratings firm Fitch stated that it would not tolerate political instability in Iceland, threatening a downgrade of the country’s debt rating if IMF-backed measures were not implemented as agreed.

http://wsws.org/articles/2009/jan2009/icel-j31.shtml

Notice how the "rating firms" have become the new GOD of this world. Telling everybody what to do because we all know how smart they are!