Iceland PM calls second snap election in less than a year
The Bright Future party in the ruling coalition quit the government citing a âbreach of trustâ after prime minister Bjarni Benediktssonâs party allegedly tried to cover up a scandal involving his father.
Icelandâs prime minister on Friday called for a second snap election in less than a year after one party in the ruling coalition quit the government.
The outgoing party, Bright Future, cited a âbreach of trustâ after prime minister Bjarni Benediktssonâs pa rty allegedly tried to cover up a scandal involving his father.
The outgoing government would be the shortest-living in the history of Iceland, whose economy was wrecked by the collapse of its banking system nearly a decade ago.
The previous government was felled by the Panama Papers scandal over offshore tax havens last year.
âWe have lost the majority and I donât see anything that indicates we can regain that. I am calling an election,â Benediktsson told reporters.
He said he would be looking to hold the election in November though that would mean it would not be possible to finish next yearâs budget.
It is ultimately up to President Gudni Johannesson, whom Benediktsson will meet with on Saturday, to make the decision on a new election.
If he accepts the call for an election he is likely to ask the government to stay in place until a new coalition is formed but he could also ask other parties to try form a majority.
The sca ndal
Bright Future accused Benediktsson of failing to inform the government that his father had signed a letter supporting a convicted paedophileâs bid to have his criminal record erased after serving five and a half years in prison.
âI was shocked to hear that. I could never sign such a letter and I would never defend such a deed,â the 47-year-old Benediktsson said.
âThe board of Bright Future has decided to terminate cooperation with the government of Bjarni Benediktsson,â the party said in a statement.
âThe reason for the split is a serious breach of trust within the government.â
The news knocked more than 1 percent off the value of the Icelandic crown against the euro and the dollar.
The prime ministerâs father, Benedikt Sveinsson, confirmed on Friday that he had signed a letter supporting his friendâs application to have his âhonour restoredâ, a procedure that effectively erases a criminal record. Among the requ irements is a letter of recommendation from a close friend or associate.
Sveinsson said he had not discussed the letter with anyone.
âThis week, it came forth that my father had written a letter... I couldnât have written such a letter myself and I will never try to defend that,â Bendiktsson told a news conference.
Economic stability at stake
Capital Economics economist Stephen Brown said a change of government could frustrate plans to overhaul Icelandâs monetary policy framework.
Benediktssonâs administration has asked experts to look at options, including pegging the crown to the euro or the pound to keep sharp shifts in the currency from destabilising the economy.
The central bank cut interest rates four times in the year to June to tame the crown.
The currency has soared on the back of a tourism boom that has helped the economy recover from years of crisis but increased the risks of overheating. The strong curr ency is also hurting Icelandâs exports.Source: TRTWorld and agenciesSource: Google News