PM poised for win despite scandal

Icelands conservative prime minister on Sunday looked set to try to form a new government after winning the general election, but it remained unclear whether he would manage to secure a viable coalition.

With 81 percent of votes counted at 1000 GMT, no party could claim a majority after Saturday's snap vote, and it could take days, weeks, or even months before Iceland has a new government in place as thorny coalition negotiations await.

Despite being embroiled in a series of scandals, Prime Minister Bjarni Benediktsson and his Independence Party were seen emerging as the biggest party, taking 16 seats in the 63-seat parliament.

They fended off a fierce challenge from the Left Green Movement and its potential allies, the Social Democratic Alliance and the anti-establishment Pirate Party.

The Left-Green Movement looked set to come in second with 11 seats, the Social Democratic Alliance with seven seats, and the Pirates with six seats.

Under the Icelandic system, the president, who holds a largely ceremonial role, tasks the leader of the biggest party with forming a government.

"I am optimistic that we can form a government," Benediktsson told AFP after early results on Saturday showed him in the lead.

His support has been bolstered by Iceland's thriving economy -- booming thanks to a flourishing tourism sector -- but has also been tarnished by his implication in several recent scandals.

The Independence Party, the dominant force in Icelandic politics that has been involved in almost every government since 1980, looked set to lose five seats in parliament.

Long talks ahead

Benediktsson's main rival, the Left-Green Movement, which won fewer votes than expected, would need at least five allies to form a 32-seat majority to dethrone the conservatives and form only the second left-leaning government in Iceland since its proclamation as a republic in 1944.

Amid growing public distrust of the elite, several anti-establishment parties have emerged, splintering the political landscape and making efforts to form a stable government increasingly difficult.

Eight parties looked set to win seats in parliament.

"I'm worried that we may have to face up to the likelihood of long, drawn-out discussions and attempts to form a government,"Arnar Thor Jonsson, a law professor at Reykjavik University, told AFP.

Negotiations to form a coalition after the October 2016 election took three months.

Another sign of voters' frustration was a 64.1 percent turnout, the lowest since 1944, according to public broadcaster RUV's figures.

Among the notable small parties is the Centre Party, formed only weeks before the elections by ex-prime minister Sigmundur David Gunnlaugsson.

He was forced to resign after being implicated in the Panama Papers tax evasion scandal, won seven seats.

All options open

Benediktsson called Saturday's election -- Iceland's fourth since 2008 and second in a year -- after a junior member of his three-party centre-right coalition pulled out over a legal controversy involving the prime minister's father.

A former lawyer and businessman whose family is one of the richest and most influential in Iceland, Benediktsson has been implicated in several financial scandals and was mentioned in the Panama Papers exposing offshore tax havens.

Despite that, many voters view Independence as the main force for economic stability and growth. Nearly half of the postwar prime ministers came from the Independence Party.

Analysts said the strongest possible government would be a three-party coalition comprising the two biggest parties, the Independence and the Left-Greens -- but their clashing ideologies make such a collaboration unlikely.

"The Left-Greens would have to swallow their pride. That could probably be the most stable government," said Egill Helgasson, a political commentator at RUV public broadcaster.

Left-Green leader Katrin Jakobsdottir, 41, told AFP on election night she was keeping all options open.

"We have eight parties in parliament and right now there doesn't seem to be any obvious majority. All parties are open for discussion," she said.

Her campaign promises included investing in social infrastructure and ensuring that Iceland's economic prosperity reaches the health care and education sectors.