In a development that should give hope to Republicans in the US, Icelandic voters have turned out the Social Democrats who led the country after the financial crisis—and returned to the pro-market parties once widely blamed for the crash. By Sunday afternoon, it looked like the Independence Party and the Progressive Party had together won more than half the votes cast in Saturday’s elections and would together form a coalition government.The key mobilizing issue seems to have been unhappiness with the economy, and with the fact that many of Iceland’s homeowners have underwater mortgages. The victorious parties promised to cut taxes, end capital controls instituted after the crisis, and encourage foreign investment in the country in order to spur growth.The Social Democrats’ key issue that left voters cold? Joining the EU. The New York Times buries the lede a little:
The center-right parties have questioned whether Iceland ought to go ahead with the application to the European Union. The prospect of membership seemed more attractive when Europe looked stable, but the Continent is now mired in its own crisis. The Progressives and Independents have said the negotiations should wait until the country holds a referendum on whether the talks should continue.
The prospect of EU membership used to be something quite desirable. Today, it’s only Balkan basket-cases like Serbia and Bosnia that are bending over backwards to get onto the sinking European ship, while countries with relatively successful recoveries like Iceland are having second thoughts. If the center-right reforms continue Iceland’s recovery, the referendum could prove to be an important tell as to just what kind of club the EU has become.[Downtown Reykjavik image courtesy of Shutterstock]