New left government
One year ago, after the fiscal collapse of their country, the 320,000 citizens of Iceland revolted and turfed a coalition government and a new left-wing coalition took over. The previous government had collapsed due to the public dissent over the handling of the financial crisis. The new coalition immediately set about removing Central Bank governor Davíð Oddsson and his aides from the bank through changes in law.
Elections were held in April, 2009 and the biggest winner in that election was the Left Green Movement who won over 21% of the votes, up from 15%. The Social Democratic Alliance leads the coalition with the Left Green Movement. Since then the new coalition has been faced with trying to rescue Iceland's economy within the existing rules of capitalism. And this is creating strains in the coalition.
IceSave = IceSlave
On 28 August 2009, Iceland's parliament voted 34–15 (with 14 abstentions) to approve on a bill (commonly referred to as the Icesave bill) to repay Great Britain and the Netherlands more than $5 billion lost in Icelandic deposit accounts. Initially opposed in June, the bill was passed after amendments were added which set a ceiling on the repayment based on the country's Gross Domestic Product.
Opponents of the bill argued that Icelanders, already reeling from the crisis, should not have to pay for mistakes made by private banks under the watch of other governments. However, the government argued that if the bill failed to pass, Britain and the Netherlands might retaliate by blocking a planned aid package for Iceland from the International Monetary Fund (IMF). Under the deal, up to 4% of Iceland's Gross Domestic Product (GDP) will be paid to Britain, in sterling terms, from 2017-2023 while the Netherlands will receive up to 2% of Iceland's GDP, in euro terms, for the same period.
Resignation of Health Minister
In September, the Icelandic Minister of Health, Ogmundur Jonasson , resigned over government attempts to reach a deal with Britain and the Netherlands on repaying billions of dollars lost in Icelandic savings accounts. Jonasson represents the government's junior coalition partner, the Left-Greens. The health minister handed in his resignation because he can't support the government on the IceSave bill.