Budget talks loom as Iceland remains without a government

Icelandic MPs are expected to be convened next week to debate the draft State budget for 2017 – despite the country still being run by a caretaker government.

Over a month has passed since Icelanders went to the polls and elected 63 new MPs for the next parliament. Two sets of formal coalition talks have so far fallen though and no formal discussions on creating a new government are currently under way.

The cabinet met this morning and discussed the issue of the 2017 State budget, with 6 December emerging as a likely date for debate in the Icelandic Parliament (‘Alþingi’).

As a result of the elections of 29 October, the two parties currently forming the caretaker government – the Independence Party and the Progressive Party – have lost their majority, commanding just 29 of the 63 representatives.

“If there is no new government by then, the draft State budget will be moved by the current caretaker government. The text will be chiefly based on Iceland’s current financial plan and the decisions taken by law in the meantime,” explains Icelandic Finance Minister and leader of the Independence Party, Bjarni Benediktsson.

“We will clearly need dialogue between all parties to secure agreement on how this issue is to be handled.”