Iceland gets new government, could restart EU entry talks

Updated:

LONDON (AP) - Iceland has a new center-right government almost three months after an election that produced no outright winner.

The Independence Party, which won the largest share of seats, has formed a coalition with the smaller Reform and Bright Future parties.

Together the parties hold the slimmest of majorities - 32 of 63 seats in Parliament.

Independence Party leader Bjarni Benediktsson will become prime minister in the new administration, state broadcaster RUV reported.

Benediktsson said Tuesday that the government would give Parliament a vote on whether to re-start European Union entry talks. Iceland applied for membership in 2009, but withdrew the bid in 2015.

The new government will disappoint those Icelanders who had hoped for radical change in an election triggered by revelations of former Prime Minister Sigmundur David Gunnlaugsson's offshore holdings. He resigned, triggering an early election, after details of his accounts were revealed in the Panama Papers leak.

The issue of tax avoidance by the wealthy is particularly sensitive in the tiny north Atlantic nation, which endured years of austerity and capital controls after its debt-swollen banks collapsed during the 2008 global financial crisis.

In the Oct. 29 election, the Pirate Party, which calls for direct democracy and digital freedom, tripled its vote and won 10 parliamentary seats. But many Icelanders also voted for continuity, in the form of Benediktsson's Independents, who had formed part of the previous coalition government.

Benediktsson, then Iceland's finance minister, was also named in the Panama Papers as having held a stake in a Seychelles-based investment company.

He didn't resign, and escaped much of the opprobrium heaped on Gunnlaugsson, whose offshore arrangements brought raucous street protests.