In Iceland, a New Government May Be Imminent

Iceland is in some ways far removed from the afflictions of continental Europe in that it is neither an EU member nor a eurozone member. But the country's April 27 parliamentary elections may nonetheless reflect mainland Europe's paradoxical dynamic with the European Union. The Icelandic economy has largely rebounded from the banking sector collapse in 2008, but the Icelandic people remain wary of austerity measures and thus will likely vote to replace the current government. The main challenges for the new government will be to dismantle capital controls that have been in place for nearly five years and keep a certain distance from the European Union while avoiding outright isolation.