Iceland's 'crazy' year ends without a government

Iceland is ending an eventful year in a political quagmire, left without a government for two months after the Panama Papers scandal and a snap election reflecting deep divisions in the island nation.

"In recent years we thought we were seeing the craziest, but we were proven wrong every time -- Iceland found ways to be even crazier," a parliamentary assistant from the Icelandic opposition said on April 6, seeing a government in tatters hesitate on its next move.

Former Prime Minister Sigmundur David Gunnlaugsson had resigned the day before over revelations of his holdings stashed away in a tax haven.

This prompted demonstrations for six consecutive days with protesters shouting "Elections right away! Elections right away!" while striking metal fences in front of Iceland's parliament.

The anti-establishment Pirate Party was pushing at the gates of power -- but they never opened.

The government said it would wait six months to hold a snap election, triggered by the latest scandal in a country that had seen its share already after the 2008 financial meltdown.

The outcome in October dashed the hopes of a clear-cut exit to the political crisis. Neither the left, the right, nor the centre had a majority.

Efforts to form a coalition were paralysed by everyone's refusal to deal with Gunnlaugsson's centrist Progressive Party, which won eight of the 63 seats.

- Back to square one -

Journalist Johannes Kristjansson, the only Icelander to have access to the Panama Papers, had been bewildered when he saw how many politicians were listed in the documents. Two months after the election he commented: "They were all re-elected."

Icelandic Finance Minister Bjarni Benediktsson, who had set up an offshore company in the Seychelles, even saw his party, the Conservatives, win the most seats, with 21. Gunnlaugsson is still an MP.

The "Pirates" revolution did not take place. Instead, the 2017 budget, adopted days before Christmas, was a compromise between the outgoing government's bill and concessions to other parties.

To form a new cabinet, "several formal and informal talks have taken place without leading to anything, and no one knows yet what will emerge," the daily Frettabladid wrote Friday.

In November, the right first tried its luck with the centre, without any success. So did the left.

Even the sworn enemies, the Independence Party and the Left-Green Movement, made an attempt. The Pirate Party, given a mandate by the president in December, failed as well.

In the last days of 2016, it was back to square one with the right renegotiating with centrists.

- Hot spot -

But it was not a lost year for the Nordic nation, also known for its breathtaking landscapes.

Its economy is flourishing with growth expected to reach five percent, after 4.2 percent in 2015. Unemployment has virtually disappeared. Incomes are rising fast. Construction is booming.

Iceland has become a hot spot for tourists from Britain, the US, Asia or Germany, at almost any time of the year, fuelling the creation of thousands of jobs and generous spending.

Although no government has emerged yet, at least a new head of state did. When Olafur Ragnar Grimsson retired after a record of five mandates, Gudni Johannesson, a 48-year old academic, was elected in June.

This year also saw an unforgettable experience for the football team which played its first major international tournament in France in June.

In the Euros, Iceland not only saw a draw with Portugal (1-1), who went on to win the tournament, but beat Austria in the last minute (2-1) before shocking England (2-1) in what was described as a "humiliating" defeat by the British press.

Thousands of Icelanders took to the streets in the capital Reykjavik. This time, they were celebrating.