Iceland heads to coalition talks after vote; Populists gain

Iceland's ruling Independence Party took the largest share of the vote in the island nation's parliamentary election but faces difficult negotiations to form a new government after populist candidates showed unexpected strength.

A record eight parties won seats in Saturday's vote as the 2008 global financial crisis continues to roil the island's politics.

Despite topping the poll, the Independence Party saw its support dip to 25 percent. The three-party governing coalition lost a total of 12 seats, leaving it 11 seats shy of a majority in parliament, known as the Althingi. The opposition Left Green Movement finished second with 17 percent, despite predictions it could win the election.

"Everyone lost," said political analyst Gunnar Smari Egilsson said. "The current opposition gained no seats while the ruling coalition lost 12 seats. Populists alone triumphed."

The upstart Center Party and People's Party both exceeded expectations, winning 11 percent and 7 percent of the vote, respectively, with promises to work for the average Icelander. That proved appealing at a time when many working-class people feel they've been left behind by the island's tourism boom.

Iceland became a poster-child for the global financial meltdown in 2008, when its debt-laden banks collapsed. That triggered political as well as economic chaos on this North Atlantic island of 330,000 people, with around 40 percent of the sitting members of parliament losing their seats in each election since the crisis. The current government, which had been in power only a year, collapsed in September amid allegations that the prime minister's father backed an effort to help the job prospects of a convicted pedophile.

Voters took to social media Sunday to lament the country's third government in four years — though some joked that the position of prime minister was probably the most unstable job in the gig economy.

Tourism has bolstered Iceland's economy in recent years, largely because of the publicity surrounding the 2010 eruption of the Eyjafjallajokull volcano. While ash spewed into the air by the eruption initially stranded millions of travelers worldwide, tourists later flocked to the island to see its pristine glaciers, fjords and the Northern Lights.

Despite that growth, many Icelanders fear the financial crisis is not yet over. On social media, debate centered on those still struggling after the "hrunid," or the collapse.

Egilsson — the former editor-in-chief of Frettabladid, Iceland's largest daily — said left-wing parties missed an opportunity this weekend to defeat the "most unpopular government in history."

"The left focused on middle-class politics, which did not resonate with the vast number of people excluded from the current economic boom," Egilsson said.

The populists promised change and cash.

The People's Party, founded by Inga Saeland, a former contestant on "The X Factor," capitalized on anger and frustration over corruption. Although she has been criticized for Islamophobic statements and critical remarks about refugees, Saeland sidestepped immigration questions during the campaign.

The Center Party, meanwhile, promised to give a windfall to "every Icelander" by distributing shares in government-owned banks to the public.

That put the party over the 5 percent threshold needed to win seats in the Althingi, even though party founder Sigmundur David Gunnlaugsson was ousted as prime minister only last year after documents leaked as part of the Panama Papers showed his wife held an account in an offshore tax haven.

On election night, spirits were high among Center Party supporters who gathered in Reykjavik, the capital. The predominantly middle-aged men attending the celebration reflected the party's electoral base.

Tour guide Magnus Kjartansson said he voted for Center because he supported Gunnlaugsson and believes the media has smeared the former prime minister.

"He is going to solve issues the rest of them are not brave enough to tackle," he said.