Olafur Hardarson, professor of political science at the University of Iceland, told Reuters that there may still be coalition talks ahead, as the Progressive Party may leave the government because of their weak showing.
The leader of the Progressive Party, Jón Sigurðsson, failed to win his seat.
Business and environment were key issues in the election. The pro-business Indpendence Party is in favor of further development of aluminumsmelters in Iceland. Aluminum producers take advantage of Iceland's abundant geothermal power. This development has been an economic boon to Iceland.
The social democratic Alliance party has called for a halt on smelter development until the environmental impact is better known. Another key issue for the Alliance is for Iceland to seek entry into the European Union.
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