Iceland’s Uncharted Political Waters

In Iceland, GDP growth is robust, government debt is rapidly shrinking, a budget deficit has turned into a healthy surplus, and unemployment has fallen to a mere two percent. And yet even there, as across Europe, populism is on the rise. One manifestation of that trend is the fact that the radical Pirate Party is in the pole position leading up to the historic parliamentary election on Saturday.

At the forefront of the political discourse during this election cycle has been welfare, such as the health-care system, which is in many ways at a breaking point; affordable housing, which is becoming increasingly difficult for young people to obtain; and the common perception that the country is moving in a less egalitarian direction. For example, data from Statistics Iceland show that last year, more than 40 percent of the total increase in wealth in the country wound up with the richest ten percent of the population. And data from Iceland’s Inland Revenue show that 20 percent of the country’s net wealth was held by the richest one percent in 2015, and just under 12 percent belonged to the top 0.1 percent. The actions of the current government—not least allowing a wealth tax to expire in 2014—have seemed to feed into this view.

The government also found itself navigating rough waters following the so-called Panama Papers revelations last spring. Documents leaked from the Panamanian law firm Mossack Fonseca revealed that Anna Sigurlaug Palsdottir, the wife of the Icelandic prime minister, Sigmundur David Gunnlaugsson, had kept her share of her family’s fortune in an offshore company known as Wintris, in the British Virgin Islands. Gunnlaugsson himself had owned half the company but then sold his shares to his wife months before he was elected to parliament in 2009.

Strictly speaking, Gunnlaugsson and his wife did not break any laws with these dealings. His handling of the situation, however—where he first denied having owned an offshore company and then angrily stormed off the set of a television show after being confronted with documents that told a different story—set in motion an unprecedented turn of events. As other Icelandic politicians were found to have connections to offshore companies, including the minister of finance and the minister of the interior, thousands of people took to the streets of Reykjavik to express their outrage and call for Gunnlaugsson and the members of his cabinet to step down.

On the morning of April 5, Gunnlaugsson, who was also chair of the Progressive Party, attempted a daring political gambit in which he threatened to dissolve parliament and call for a snap election if his coalition partner, the Independence Party, would not publicly back him and his government. The plan backfired, however, and having lost the trust of his coalition partner, as well as the majority of his own parliamentary group, he stepped down as prime minister later that day. The governing parties promised an early election, which is set for next Saturday, October 29.

Policywise, the election is being fought on issues to the left of the center. The governing parties—the Progressive Party and the Independence Party—have tried to appease voters by increasing payments for parental support and welfare, but it is almost inconceivable that they will remain in power together after the election, considering that the most recent polls show that they have only just over 30 percent of the vote combined. The Progressives are mired in bitter infighting, having just ousted Gunnlaugsson as chair following a showdown with his deputy and the current prime minister, Sigurdur Ingi Johannsson. The Independence Party, meanwhile, is now dealing with a new liberal political force, Vidreisn (Revival), which has been challenging the Independence Party’s place at the center-right. Vidreisn includes a number of candidates from the business and industry sectors (long supporters of the Independence Party) who were disenchanted by what they perceived as a more conservative and anti-EU stance taken by the Independence Party in the last few years.

Polls suggest that seven parties will be represented in the Althing, the Icelandic parliament, after the election, breaking from the traditional four-party system, which has been composed of conservative liberals, centrists, social democrats, and leftist environmentalists. The Pirates will likely be leading the way in prodding the old guard to walk the plank.

One of the principal casualties of the 2008 economic crash was the public’s trust in the country’s political institutions, something that has played well for the Pirates. For the last two years, polls have shown that up to 40 percent of the electorate supports the party, although over the past few months, its share seems to have stabilized at about 20 percent, making it Iceland’s second-largest party, surpassed only slightly by the Independence Party, which has just over 20 percent of the public’s support.

Eva Heida Onnudottir, a postdoctoral researcher at the University of Iceland’s Faculty of Political Science, believes that since the election is so close, there is a good chance that the Pirates will maintain their current level of support. In that case, they will emerge as a key political force after the election, since they are likely to be the largest of all the opposition parties. “Their numbers might suffer from the fact that the Pirates have a substantial following among young people, a group which is less likely to show up and vote on election day,” said Onnudottir. “In spite of that, they are still likely to multiply their numbers from the last election and be in a strong position.”

When asked if the Pirates could be classified as a populist party, Onnudottir explained, “Most political parties are populist in some ways, but it is important to distinguish between right-wing populists, which run on a narrative of ‘us against an outsider threat,’ especially regarding immigrants and refugees, and left-wing populists, which emphasize a split between ‘us’ and the financial elites.” She went on to elaborate, “If we look at such parties, like Podemos in Spain, Syriza in Greece and the Five Star Movement in Italy, there are definite parallels between them and the Icelandic Pirates.” It is worth noting, however, that in spite of some basic similarities with other populist parties, such as railing against the entrenched political and financial elites to empower the public, the Pirates are hard to pin down on the traditional left-right political spectrum.

In the last election, held in 2013, the Pirate Party could be said to have been riding the same wave of antiestablishment fervor seen throughout Europe today. They performed much better than had been foretold: it was considered doubtful, based on pre-election polls, that they would come near to winning any seats in parliament, but they won three. The party’s emphasis on transparency, good governance, and civil rights no doubt strengthened its status as an agent of change.

Smari McCarthy, one of the founders of and a spokesperson for the Pirates, said he is optimistic that the promising poll numbers will materialize as votes come election day. “At first, people did not have faith in us,” he said. “We were a strange little party with a weird name and some radical ideas. But as soon as we started rising in the polls, a lot of people started looking at our issues and values and liked what they saw.”

The Pirates have come a long way from their early days. The party was founded in 2012 and based its ideology on that of the original Pirate Party in Sweden, which was founded in 2006 to bring about changes regarding Internet copyright issues. Since then, they have expanded their platform to include civil rights, privacy, and direct democracy, among other concerns. On that last issue, the Pirates themselves have an unconventional means of in-party policymaking: they use an online voting system to make decisions.

But in spite of the party’s emphasis on transferring political power to the public, McCarthy is not fully comfortable labeling the Pirates as populists. “I am not so keen on that word, because it can mean two things,” he explained. “On the one hand, you appeal to the public using empty phrases and promises, but on the other, you are empowering the public. If populism means empowering, then yes, we can ascribe to that, but if it is just empty rhetoric, then no, that is not what we are about.” Indeed, the Pirates have put forth some lofty ideas, but the real work—turning rhetoric into empowerment—will begin after the election.

The key to the rise of the Pirates in Iceland and other upstart parties around the world, according to McCarthy, is the failure of the traditional parties to respond to the challenges of a new and changing society. “The system is broken, but the answer from the old guard is that everything is really fine, that the current problems are temporary and things will sort themselves out,” McCarthy told me. “The public can really see and feel that things are not the way they should be.”

His view is supported by the fact that trust for political institutions has been at a historic low in Iceland since the 2008 financial crisis. Opinion polls reveal that less than 20 percent of the public trusts the Althing. The traditional four parties combined are now polling at around 55 percent, down from over 90 percent five years ago.

Although things are looking good for the Pirates right now, the postelection negotiations could prove to be a challenge, since the path to forming a governing coalition looks bumpy. A few days ago, the Pirates called for a meeting with the three other opposition parties to discuss the possibility of forming a coalition government after the election. The request was not well received and has caused some friction in the last days on the campaign trail. Still, McCarthy is certain that the Pirates will be able to find common ground with other reform-minded parties without diluting their principles. Their core values, he said, are connected not so much to the separate issues but to the political process itself.

“We want to change the way the Althing, the government, and the country’s institutions function,” he said. “We can find a compromise regarding many issues without sacrificing our values.” When asked if he fears for the Pirates’ reputation as outsiders if they do indeed become part of the establishment, McCarthy said that he and his colleagues are well aware of the perils that come with making deals with the traditional parties.

“That is why we aim to take good care to nurture and listen to the grass roots,” he said. One of the ways to do so, McCarthy explained, is to designate one of the prospective parliamentarians as a grass-roots contact on top of using online voting to shape policy. That in and of itself would be an interesting experiment in government. For example, will the emphasis on grass-roots participation have an effect on government efficiency or responsiveness, especially compared with the traditional method of obtaining policy mandates from large countrywide conferences?

At this point, pressure on the party is building, and the Pirates have been feeling it. Their opponents on the right have sought to make them out to be a leftist or socialist group and have warned against the uncertainties that their ideas of constitutional reform might bring. Infighting among the Pirates has been brought to the fore, and their own democratic bona fides, regarding the selection process of candidates, have been questioned. There is also no certainty that the opposition forces will come together after election day, and the Pirates could find themselves the odd man out for another parliamentary term. Still, the stage is set for a reset of the Icelandic political landscape, and it is a real possibility that Iceland, a country founded in part by pioneering Viking raiders, will be the first in the world to have a government with Pirates at the helm.