ABSTRACT
This chapter sets the scene for post-crisis politics in Iceland, discussing both the massive size of the economic collapse and the ensuing political turmoil. It describes the severity of the financial collapse and the political protests that followed, which were unprecedented in the history of modern democracy in Iceland, as well as the resignation of the government, with an early election six months after the collapse. The left-wing government that took over had to steer the country through recovery, and the consequences of the financial collapse left a mark on the government’s term in office. The post-crisis period has been marked by huge electoral volatility, the rise of new challenger parties and three early elections. Thus, even if the economy settled down, politics did not.
