Ministry of Economic Affairs (Iceland)

Politics of the Republic of Iceland take place in the framework of a parliamentary representative democratic republic, whereby the President is the head of state, while the Prime Minister of Iceland is the head of government in a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and parliament, the Althingi. The Judiciary is independent of the executive and the legislature. It is arguably the world's oldest assembly democracy.

Elected to a four-year term, the President has limited powers and is poised in a largely ceremonial office that serves as a diplomat and figurehead.

The prime minister and cabinet exercise most executive functions. The head of government is the prime minister, who, together with the cabinet, takes care of the executive part of government. The cabinet is appointed by the president after general elections to Althing; however, this process is usually conducted by the leaders of the political parties, who decide among themselves after discussions which parties can form the cabinet and how its seats are to be distributed (under the condition that it has a majority support in Althing). Only when the party leaders are unable to reach a conclusion by themselves in reasonable time does the president exercise this power and appoint the cabinet himself. This has never happened since the republic was founded in 1944, but in 1942 the regent of the country (Sveinn Björnsson, who had been installed in that position by the Althing in 1941) did appoint a non-parliamentary government. The regent had, for all practical purposes, the position of a president, and Sveinn in fact became the country's first president in 1944. The governments of Iceland have almost always been coalitions with two or more parties involved, because no single political party has received a majority of seats in the Althing during Iceland's republican period. The extent of the political powers possessed by the office of the president are disputed by legal scholars in Iceland; several provisions of the constitution appear to give the president some important powers but other provisions and traditions suggest differently.

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