VZCZCXRO8054
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHRK #0087/01 0871727
ZNR UUUUU ZZH
P 281727Z MAR 07
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC PRIORITY 3219
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHNY/AMEMBASSY OSLO 0292
RUEHSW/AMEMBASSY BERN 0005

UNCLAS SECTION 01 OF 02 REYKJAVIK 000087 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL IC
 
SUBJECT:  ICELAND: PARLIAMENT'S SHORT YET BUSY YEAR 
 
 
¶1.  (U) Summary:  Due to the upcoming May 12 parliamentary election 
the Icelandic parliament, the Althing, cut its 2006-2007 session 
short.  Nevertheless, the Althing passed 114 bills and 33 
resolutions, the most contentious of which was the reestablishment 
of the Icelandic National Broadcasting Service as a public 
corporation.  Other notable bills include: a reduction in the VAT 
and commodity charges on food; de facto legalization of 
prostitution; and a new legal framework for Icelandic participation 
in international peacekeeping.  End Summary. 
 
BACKGROUND 
---------- 
¶2.  (U) The 2006-2007 legislative session of the Althing began 
October 2 and adjourned early this year, on March 18, because of the 
May 12 parliamentary elections.  Members of parliament (MPs) are 
thus granted approximately two months to launch their re-election 
campaigns and lobby for the support of their respective political 
parties. The Althing passed a total of 114 bills and 33 resolutions, 
and 34 unscheduled debates took place [Comment:  MPs can request 
time to discuss topics they think are relevant at the moment, such 
as top news stories and possible parliamentary response to them. 
End Comment.]  Despite a packed agenda and heated debates over both 
small and large issues, which are characteristic of short 
pre-election legislative sessions, the MPs still managed to show 
great efficiency in passing laws. 
 
ONE CONTENTIOUS ISSUE... 
------------------------ 
¶3.  (U) As always there were several hotly contested issues in the 
2006-2007 session.  MPs spent approximately 70 hours debating the 
merits of a bill to reestablish the state-run Icelandic National 
Broadcasting Service (RUV) as a public corporation.  Proponents of 
the bill argued that it would grant the institution increased 
flexibility and a better market position, as well as strengthen its 
role as a public service broadcaster.  The opposition parties 
initiated a filibuster, but in the end the coalition partners were 
successful in hammering the bill through. 
 
...BUT OTHERS NOT TO BE FORGOTTEN 
--------------------------------- 
¶4.  (U) The parliament unanimously passed a bill that reduces the 
food Value Added Tax (VAT) and commodity tax, that is expected to 
deliver a 7-10 percent decrease in food prices for the average 
Icelandic family.  In addition, MPs passed a campaign finance reform 
bill that limits the contributions of individuals and corporations 
to political parties, but increases direct state funding. 
 
¶5.  (U) The Althing passed a bill establishing a more robust legal 
framework for the Iceland Crisis Response Unit (ICRU) and other 
Icelandic participation in international peacekeeping projects.  The 
bill clearly delineates the legal rights of peacekeepers, 
responsibilities, rights, and duties, and enshrines a more civilian 
role for the ICRU.  Observers consider the passing of this bill 
important because the GOI's increase in contributions to 
international peacekeeping operations, both through the ICRU and by 
funding to UN peacekeeping operations, has gone up drastically in 
the past few years. 
 
¶6.  (U) In November last year the Liberal Party criticized the 
government for allowing the free passage of labor from EU states in 
Eastern Europe, and mishandling of integration policies for 
immigrants.  The government reacted quickly and allocated ISK 100 
million (1.4 million USD) for Icelandic classes for foreigners and 
will put a halt on labor coming from new EU member states Romania 
and Bulgaria until January 1, 2009.  On a related note the law on 
Icelandic citizenship was amended in March, stipulating that 
applicants for citizenship must pass an Icelandic language test in 
order to become an Icelandic citizen. 
 
¶7.  (U) The Minister of Justice introduced a bill to amend the 
Chapter on Sexual Offenses in the General Penal Code in March last 
year, but the Althing did not pass the bill until the final days of 
the 2006-2007 legislative session.  The bill broadened the 
definition of rape, and essentially legalized prostitution as a main 
source of income, but banned its public advertising and use of 
intermediaries (pimps). 
 
EXIT OF POLITICAL HEAVYWEIGHTS 
------------------------------ 
¶8. (U) During the recent parliamentary session one MP passed away 
and seven MPs resigned from the Althing.  The most notable of the 
seven were David Oddsson (Independence Party) and Halldor Asgrimsson 
(Progressive Party), who each had served as Prime Minister and 
Foreign Minister.  Consequently, the Independence and Progressive 
Parties' (the ruling coalition partners) leadership changed as well 
when Oddsson and Asgrimsson resigned as chairmen of their parties. 
In addition, three MPs switched parties, without affecting the 
balance of power. 
 
REYKJAVIK 00000087  002 OF 002 
 
 
 
¶9. (SBU) Comment: In the run-up to parliamentary elections, the MPs 
can point to electorate-friendly successes such as the food VAT 
reduction and acts to step up the integration of immigrants to 
Iceland.  David Oddsson's and Halldor Asgrimsson's departures marked 
a changing of the guard that signals a generational shift in 
Icelandic politics.  A number of new people emerged in the parties' 
primary elections this winter and there is speculation that almost 
half of the current MPs could be replaced.  End Comment. 
 
VAN VOORST