ICELAND: PRIME MINISTER DIAGNOSED WITH CANCER, DATE

UNCLAS SECTION 01 OF 02 REYKJAVIK 000017

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STATE FOR EUR/NB, INR-B
OSLO FOR DATT
DOD FOR OSD-P (FENTON)
TREASURY FOR LAWRENCE NORTON AND ERIC MEYER

E.O. 12958: N/A
TAGS: PGOV PINR PREL ECON IC
SUBJECT: ICELAND: PRIME MINISTER DIAGNOSED WITH CANCER, DATE
PROPOSED FOR EARLY ELECTIONS

Refs: A) Reykjavik 012
B) Reykjavik 013


1. (U) Summary: Iceland's Prime Minister stunned the nation on
January 23 with an announcement that he has been diagnosed with
esophageal cancer and will not stand for reelection as Independence
Party chair at the coming national congress. PM Haarde said he
received the diagnosis on January 21 and that his doctors have
recommended immediate surgery; he will go abroad at the end of the
month as the necessary treatment is not available in Iceland. At
the same time, Haarde announced that his party has proposed holding
early parliamentary elections in May, subject to further discussion
with their coalition partners in the Social Democratic Alliance.
Separately, SDA Chair and Foreign Minister Gisladottir is set to
return to Iceland on January 23 from Sweden, where she was receiving
treatment for a brain tumor diagnosed last fall. According to the
MFA Spokesman, Gisladottir's tumor was confirmed as benign, though
it will require further treatment. Though some are hopeful that the
government will have some breathing room now that elections are set
for the spring, a shocked Icelandic public is also facing the second
major illness for one of the country's leaders in six months and is
concerned about a leadership vacuum at a crucial time. End
Summary.


2. (U) Following a week of raucous demonstrations and increasing
political pressure for early Althingi (parliament) elections
(reftels),the central committee and MPs of Prime Minister Geir
Haarde's Independence Party (IP) met on January 23 to discuss the
status of the coalition government. The previous night, Foreign
Minister Ingibjorg Solrun Gisladottir, Chair of coalition partner
the Social Democratic Alliance (SDA) tamped down rumors of an
immediate government collapse by pledging to maintain the coalition
if the parties agreed to hold elections this spring. This sparked
new rumors that the IP central committee would decide to postpone
the party's national congress, which had been set for January
29-February 1, in order to prepare for such elections.


3. (SBU) However, PM Haarde stunned the assembled media with an
announcement that he has been diagnosed with a malignant tumor in
his esophagus. A regular medical examination had revealed the tumor
last week, but on January 21 Haarde was informed that biopsy results
indicated that it was malignant. He will have to undergo immediate
medical treatment, which cannot be performed in Iceland and
therefore he will travel abroad around the end of the month. (NOTE:
In a subsequent conversation with Ambassador, Haarde's Foreign
Affairs Advisor did not specify in which country Haarde will be
treated. The Ambassador offered assistance and support. END NOTE.)
The PM added that his doctors say the prognosis is good and that he
expects to maintain full working capacity, at least in the next few
months. Due to his ill health, Haarde has decided not to seek
reelection at the IP's national congress. He says his decision was
made easier knowing that there are highly capable leaders to choose
from in the IP.


4. (U) On the question of early elections, Haarde announced that
the IP will request that parliamentary elections take place on May

9. He will discuss this proposed date with SDA Chairman Gisladottir
over the weekend. Echoing language that Gisladottir used in her own
statement the previous night, the PM stressed that the coalition
government will continue to work hard to carry out the tasks that
are most urgent to rescue households and businesses in Iceland.
Haarde added that he would make every effort to see to it that
preparations for the elections and the election campaign do not
disrupt the economic recovery program which the government is
implementing in cooperation with the International Monetary Fund.


5. (U) In connection with the spring elections, the IP has also
decided to postpone its national congress until March 26-29. The
party will draft its election platform and select a new chairman
that will lead the party in the upcoming elections. (COMMENT: As
reports have grown in recent weeks of discord within the IP over the
question of joining the European Union, this may also give the party
a further chance to coalesce around the idea -- or wake up to
reality, depending on whom you ask -- of approving a pro-EU
platform. END COMMENT.)

Foreign Minister's Health: Better News
--------------


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6. (SBU) Separately, the MFA sent out a press release January 23
announcing FM Gisladottir's return to Iceland from Sweden, where she
has been undergoing medical treatment for a brain tumor over the
past week. (NOTE: Gisladottir was diagnosed with a tumor in the
fourth cerebral ventricle after collapsing during the UN General
Assembly in New York this past September. She underwent brain
surgery before returning to Iceland and has had one subsequent
procedure here in Reykjavik prior to her trip to Sweden last week.
END NOTE.) This morning, her doctors confirmed that the tumor, most
of which was removed in surgery, was benign. She will not be
admitted to the National Hospital in Reykjavik upon her arrival as
had previously been announced, but instead will rest at home and
will therefore be absent from work for some time. The MFA's
spokeswoman confirmed to DCM that the tumor was indeed benign,
though it had been behaving "peculiarly" and had given rise to fears
that it was in fact malignant. The spokeswoman was visibly relieved
to have heard the news about Gisladottir's health.


7. (SBU) Staffers at the Foreign Ministry had been bracing for the
worst, as Gisladottir's prolonged treatment in Sweden appeared to
counter earlier claims that the tumor was benign. Despite some
policy disputes on certain issues, the FM is very popular among the
ministry rank-and-file, a surprising development for those used to
thinking of the MFA as a building full of IP and Progressive Party
ideologues. The leadership vacuum at the MFA -- due to
Gisladottir's illness as well as that of her deputy, the Permanent
Secretary, who is battling colon cancer -- has been an evident
strain on the ministry over the last six months.

A stunned, worried public
--------------


8. (SBU) The public reaction to the PM's ill health can only be
described as utter shock. Even though most offer the PM their
condolences, people are worried about how the country will be run,
and who will really be holding the reins of power. After the
intensifying political tension of this week, a number of
commentators are relieved to hear that elections will likely be held
in May. Independence Party stalwarts tell us that they are relieved
to have some explanation for what one called Haarde's "strange"
behavior in recent weeks, and are hopeful that the IP will now have
a chance to set a clear course and regain the nation's support.
However, outside the IP, with both the PM and FM afflicted with
serious illness, some think that the proposed May 9 date is too far
away. In particular, MPs from the Left-Green Party used the PM's
announcement as a reason to renew their calls for immediate
elections. There are also doubts regarding the PM's and FM's
ability to be fully functional when they return to work after
recovering from medical treatment.


9. (U) Bloggers and political commentators are already suggesting
who will be likely candidates for the chair of the IP. The most
often mentioned are MP Bjarni Benediktsson; Minister of Health
Gudlaugur Thor Thordarson; Minister of Education and Deputy Chair
Thorgerdur Katrin Gunnarsdottir; MP Kristjan Thor Juliusson; and
even political veteran and former PM and chair Thorsteinn Palsson.



10. (U) On the practical question of who will run the country,
party rules and the coalition agreement designate Minister of
Education and IP Deputy Chair Gunnarsdottir as Acting Prime Minister
should the PM take leave of his office.


11. (SBU) Comment: Iceland, already stunned by the demonstrations
of the past week and the economic collapse, is now jolted by another
serious blow. The lack of leadership at the top of the SDA has been
evident throughout Gisladottir's illness, and many here fear that a
similar vacuum will develop with the Prime Minister absent. Others,
particularly within the IP, are more hopeful that with a clear date
set for elections, pressure on the government will ease somewhat and
allow the parties to simply go about the business of governing and
preparing for a critical economic program review by the IMF in
February (septel).

VAN VOORST