The Icelandic "Big Bang"? Evolution of Domestic Politics and Public Opinion Between 2008 and 2012

For many reasons, Iceland’s experience of the 2008 financial crisis constitutes an interesting case study, especially from a political point of view. Following popular pressure, the government collapsed in early 2009.  On 25 April 2009, following anticipated Parliamentary elections, the pro-European Social Democratic Alliance became the largest party for the first time of its history, overruling the conservative Independence Party and together with the Left-Green Movement forming the first left-wing government of the Icelandic history. On 19 July 2009, Iceland applied – for the first time – for membership in the European Union. However, between 2009 and 2012, the political and economic context changed: Iceland exited recession in 2011 and international disputes emerged. As a result, public support on the government and on EU membership as well as voting intentions changed. Accordingly, this empirical article examines the changes that occurred in Iceland’s domestic politics following the financial crisis and aims at determining whether it is relevant to use the notion of political “big bang”: did domestic political changes that occurred in 2009 have lasting effects on Iceland’s politics? How did public opinion regarding EU membership evolve and why? 

This article is divided into two sections: the first one analyses the political and economic crisis between October 2008 and April 2009: it is argued that the financial crisis triggered the so-called “pots and pans revolution”, which had an impact on the consensual nature of the State and led to a series of political change during the first semester of 2009. The second one examines the aftermath of the crisis, from late 2009 to mid-2012. An emphasis is put on two international events that had an impact on public opinion: the Icesave dispute and the mackerel war. It will then be concluded that while the financial crisis triggered unprecedented popular protests, notably resulting in a series of political change, the political context evolved between late 2009 and 2012 as opinion polls suggest that support for the government and voting intentions for parties in power decreased, in favour of the conservative Independence Party. In this sense, a comeback to the pre-2009 political situation (with the Independence Party as largest party and the withdrawal of the application for EU membership) can be expected after the next Parliamentary elections in 2013.