Currency Restrictions Tightened in Iceland Skip to content

Currency Restrictions Tightened in Iceland

By Iceland Review

An emergency bill on tightened currency restrictions was passed just before midnight at Iceland’s Althingi parliament last night. The bill was approved with 31 votes; members of the Independence Party abstained from the vote.

The bill was distributed yesterday and, according to RÚV, had to be handled quickly after markets closed yesterday and before they reopened this morning.

Inside Iceland’s Althingi Parliament. Copyright: Icelandic Photo Agency.

“It is clear that a double market with currency has formed and this is not desirable at all,” Fridrik J. Arngrímsson, managing director of the Federation of Icelandic Fishing Vessel Owners (LÍÚ) told Fréttabladid. He supports temporary tightened currency restrictions to ensure equality.

The purpose with the tightened currency restrictions is to prevent currency leaks, which Minister of Finance Steingrímur J. Sigfússon says are weakening the Icelandic króna, reports.

With these tighter currency restrictions, trade with foreign companies will be credited in a foreign currency and not in the ISK as has been the case up until now.

This bill was given priority and while it was being discussed at parliament other bills were put on hold, reports.

Prime Minister Jóhanna Sigurdardóttir said last week that 38 cases had to be discussed at Althingi before parliament is dismissed, and political parties can launch their campaigns for the upcoming elections on April 25, and that 22 of these cases necessarily have to be approved by that time.

While many of these “critical” cases have since then been handled and approved, uncertainty surrounds the date of dismissal of parliament with yesterday’s delays.

One of the bills that was postponed yesterday is a controversial bill on changes to the constitution, which is subject to harsh criticism by the Independence Party.

The government parties, the Social Democrats and the Left-Greens, absolutely want parliament to pass that bill before the elections.

According to Fréttabladid, the Independence Party threatened to hold up the bill on tightened currency restrictions if the bill on changes to the constitutions was passed by the committee handling it, as was supposed to happen last night.

The controversial bill includes provisions on a constitutional parliament and on natural resources going into national ownership, reports.

The Independence Party argues that parliament requires more time to discuss such significant changes to the constitution.

The Progressive Party, which protects the current government from a vote of no confidence, is eager for parliament to respond to their call for a constitutional parliament.

Click here to read more about the constitutional parliament and here to read about the original bill on currency restrictions that was passed in November last year.

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