Freedom in the World 2014 - Iceland



Parliamentary elections in April 2013 saw the decisive ousting of the ruling center-left Social Democratic Alliance (SDA)/Left-Green Movement government, led by Prime Minister Jóhanna Sigurðardóttir of the SDA, and its replacement with a center-right alliance of the Progressive Party and the Independence Party. Sigmundur Davíð Gunnlaugsson, the leader of the Progressive Party, became Iceland’s new prime minister. The new center-right government put a halt to the country’s negotiations for EU membership, until the question could be put to referendum. The date of the referendum had not been set at year’s end.

In March, parliament declined to pass a constitutional draft that had been crafted through an experimental crowd-sourcing process set in motion by Sigurðardóttir’s government; the major principles of the draft had been endorsed by voters in a nonbinding referendum in October 2012. The new center-right government elected in April does not support the draft constitution, and since the current constitution mandates that two separate parliaments must pass constitutional changes, Iceland’s experimental approach to constitutional reform will not bear fruit for at least two parliamentary election cycles.

Iceland continues to deal with the fallout of its 2008 financial crash—in which a major credit crisis forced the government to nationalize three large banks—both domestically and internationally. In 2013, a number of bankers were charged with various financial crimes pertaining to the crash by the country’s special prosecutor for economic crimes. A ruling by the court of the European Free Trade Association in January 2013 on the repayment terms to compensate Dutch and British depositors at Icesave—an online savings account brand owned and operated by the private Landsbanki, which collapsed in 2008—sided with Iceland against the Netherlands and the United Kingdom. The ruling found that while the UK and the Netherlands had chosen to bail out their national depositors with outstanding assets in the bankrupt Icelandic banks, the state of Iceland could not be sued to repay the Dutch and UK depositors, not for the principal nor for the interest accrued. The ruling stabilized the Icelandic economy and was seen as a boon to the then-opposition. In April 2011, voters had defeated a referendum on repayment plan for British and Dutch depositors at Icesave. Landsbanki announced in 2012 that a sale of its assets should fully cover repayment to all British and Dutch depositors, over a series of years. However the bank applied for a loan extension in 2013, saying it wanted to prevent destabilizing the recovering Icelandic economy and feared that rapidly buying large amounts of foreign currency to service the debt could do so.  A decision was pending by year’s end.

Political Rights and Civil Liberties: 


Political Rights:  40 / 40 [Key]

A. Electoral Process:  12 / 12

The Icelandic constitution, adopted in 1944, vests power in a president, a prime minister, the 63-seat unicameral legislature (the Althingi), and a judiciary. The Althingi is arguably the world’s oldest parliament, established in approximately 930 AD. The largely ceremonial president is directly elected for a four-year term. Ólafur Ragnar Grímsson won the presidential election and his fifth term in July 2012, defeating independent journalist Thóra Arnórsdóttir.

The legislature is also elected for four years, but can be dissolved for early elections in certain circumstances. The prime minister is appointed by the president. In the April 2013 parliamentary elections, the center-left coalition of SDA and the Left-Green Movement lost half the seats it held in the Althingi, in the biggest loss of seats any governing coalition in Iceland has experienced since the country’s independence in 1944. Opposition to unpopular austerity measures, to taxation levels, and to EU ascension negotiations, as well as high levels of personal debt, were seen as major voter concerns during the election campaign. The Althingi now comprises the Progressive Party and the Independence Party, with 19 seats each, as well as the SDA with 9 seats, the Left-Green Movement with 7, and two new parties—Bright Future and the Pirate Party—with 6 and 3 seats, respectively.


B. Political Pluralism and Participation:  16/ 16

Three major political parties and three smaller parties are represented in the Althingi. The center-right Independence Party has historically dominated Icelandic politics until 2009, when Sigurðardóttir’s center-left SDA/Left-Green coalition took power and elections left leftist parties in the majority for the first time in Iceland. The severe banking crisis of 2008 spawned several new political parties and movements in Iceland and the 2013 parliamentary elections were contested by 15 political parties, as opposed to 7 in the 2009 elections. The most viable of these new parties has proven to be the Best Party, led by comedian Jón Gnaar, who won the mayoralty of Reykjavik in 2010. Initially a satirical joke party, Best Party, as well as its sister party in the Althingi, Bright Future, have developed coherent, left-leaning agendas. In October 2013, Gnaar announced that he would not run for reelection in Reykjavik’s 2014 municipal elections and that the Best Party would dissolve and join forces with Bright Future.

Foreigners can vote in municipal elections if they have been residents for at least five years, or three years for citizens of Scandinavian countries.


C. Functioning of Government:  12 / 12

While corruption is not a serious problem in Iceland, the country has experienced politically tinged business-fraud scandals in recent years, in particular in connection with 2008’s banking crash. A special prosecutor to investigate the financial collapse was appointed by parliament in 2009 in response to mounting public anger and to ensure accountability for the financial crisis; his mandate was expanded to economic crimes more generally in 2011.

In September 2013, about 140 cases were under investigation, approximately half of which were related to the crisis. Cases have been brought against all major banks involved in the crash, and more cases are expected to come under investigation in the coming years. In December 2013, 15 top managers of both Kaupthing and Landsbanki, Iceland’s two biggest banks at the time of the crash, were sentenced to between 3 and 5 years in prison, for charges of market manipulation. Former prime minister Geir Haarde, who faced charges of negligence was found guilty of one count in April 2012 but not sentenced to any punishment and Baldur Guðlaugsson, former undersecretary of the Ministry of Finance, was convicted of insider trading and sentenced to two years in prison in February 2012,

Iceland was ranked 12 out of 177 countries surveyed in Transparency International’s 2013 Corruption Perceptions Index.


Civil Liberties:  60/ 60

D. Freedom of Expression and Belief:  16 / 16

The constitution guarantees freedoms of speech and the press. In June 2010, parliament unanimously passed the Icelandic Modern Media Initiative, which mandates the establishment of stringent free speech and press freedom laws and focuses on the protection of investigative journalists and media outlets. Iceland’s wide range of print publications includes both independent and party-affiliated newspapers. The autonomous Icelandic National Broadcasting Service competes with private radio and television stations. Private media ownership is concentrated, with the Norðurljós (Northern Lights) Corporation controlling most of the private television and radio outlets and two of the three national newspapers. Internet access is unrestricted.

The constitution provides for freedom of religion. About three-quarters of Icelanders belong to the Evangelical Lutheran Church. The state supports the church through a special tax, which citizens can choose to direct to the University of Iceland instead. A 2008 law requires the teaching of theology in grades 1 through 10. Academic freedom is respected, and the education system is free of excessive political involvement.


E. Associational and Organizational Rights: 12 / 12

Freedoms of association and peaceful assembly are generally upheld. Peaceful protests occurred in September and October 2011 against IMF austerity measures and the government’s failure to protect Icelanders from housing foreclosures. Many nongovernmental organizations operate freely and enjoy extensive government cooperation. The labor movement is robust, with more than 80 percent of all eligible workers belonging to unions. All unions have the right to strike. There were no significant strikes in 2013.


F. Rule of Law:  16 / 16

The judiciary is independent. The law does not provide for trial by jury, but many trials and appeals use panels of several judges. The constitution states that all people shall be treated equally before the law, regardless of sex, religion, ethnic origin, race, or other status. Prison conditions generally meet international standards.

The Act on Foreigners was amended in 2004 to allow home searches without warrants in cases of suspected immigration fraud, among other changes.


G. Personal Autonomy and Individual Rights:  16 / 16

Women enjoy equal rights, and more than 80 percent of women participate in the workforce. However, a pay gap exists between men and women despite laws designed to prevent disparities. Iceland topped the World Economic Forum’s 2013 ratings on gender equality. Following the 2013 elections, women hold 40 percent of seats in the Althingi. In 2009, Sigurðardóttir became Iceland’s first female prime minister and the world’s first openly lesbian head of government. Parliament unanimously passed a law legalizing same-sex marriage in 2010, full equal rights to same-sex couples on adoption and assisted pregnancy were enshrined in a 2006 law passed by Parliament. A comprehensive law on transgender issues was adopted in 2012, to simplify legal issues pertaining to gender reassignment surgery and ensure full and equal rights to transgender Icelanders as well as guaranteed relevant health care. A committee was appointed in 2008 to develop new strategies to combat human trafficking in Iceland, and parliament passed a law criminalizing human trafficking in 2009.


Scoring Key: X / Y (Z)

X = Score Received

Y = Best Possible Score

Z = Change from Previous Year

Full Methodology

2014 Scores



Freedom Rating

(1 = best, 7 = worst)

Civil Liberties

(1 = best, 7 = worst)

Political Rights

(1 = best, 7 = worst)