Iceland opposition leader urges government to focus on domestic challenges

Guðrún Hafsteinsdóttir, chair of Iceland’s Independence Party, says the government must accept the result of the referendum rejecting the resumption of European Union membership negotiations and focus on domestic priorities, in an opinion article published by mbl.is.

She said voter turnout was exceptionally high, the highest in a referendum in Iceland’s republican history, and that the result was clear. Hafsteinsdóttir said she had long believed Iceland was better off as an independent country outside the European Union, while maintaining close cooperation with Europe through the European Economic Area Agreement and strong ties with allied and friendly nations on both sides of the Atlantic.

Before the vote, the government placed strong emphasis on trusting the public to discuss the issues calmly and make its own decision, she wrote. But the past few days had shown that respecting the result required more than simply saying so, particularly when the outcome was not what the government had hoped for.

“There is little respect in saying that the result is accepted and then immediately explaining why voters were in fact wrong,” Hafsteinsdóttir wrote. Respect for a democratic result could not depend on the outcome, she said, adding that the government must listen when the public had spoken.

Urgent domestic tasks

Hafsteinsdóttir said the government should now turn to the issues for which it was responsible. Inflation had remained above 5% during the year and measured 5.6% at the end of August. The Central Bank had raised interest rates again on August 19, bringing them to 8%, and had specifically pointed to higher public charges as contributing to rising inflation.

High interest rates and persistent inflation had already placed considerable pressure on households, she said. At the same time, the government had promised to deliver a balanced budget “whatever the cost”. Given the spending increases already announced, she said it was difficult to see how that goal could be achieved without substantial tax increases, which would place an even greater burden on households.

The government should instead control spending, set priorities and create conditions for inflation and interest rates to fall, she wrote. These were not problems the European Union would solve for Iceland, but tasks for the government, which needed to manage the public finances and stop driving up costs through its own decisions.

Hafsteinsdóttir said the government’s “homework” also included increasing productivity, facilitating investment, securing sufficient energy for households and businesses, and accelerating housing construction. Major tasks remained in healthcare, law enforcement and other basic services, she added.

It would be a serious mistake for the government to spend the coming weeks analysing why the public had voted no or searching for explanations for the result, she wrote. The answer was clear: voters had rejected the idea that solutions to Iceland’s biggest challenges lay in a new European initiative and had instead sent a clear message that the country should do its own homework.