Iceland’s Government Discusses Future of Coalition Skip to content

Iceland’s Government Discusses Future of Coalition

Leaders of the government parties discussed the future of the Independence Party-Social Democrat coalition all day yesterday, after receiving an announcement from Minister for Business Affairs Björgvin G. Sigurdsson yesterday morning that he would step down.

Prime Minister Geir H. Haarde and Foreign Minister Ingibjörg Sólrún Gísladóttir, who returned from sick leave in Sweden on Friday, discussed the matter both with each other and with their party members, Morgunbladid reports.

Late in the evening Haarde told reporters that a decision had not yet been reached on whether the Independence Party-Social Democrat coalition government would be terminated or whether it would continue until the elections in spring.

“Both outcomes are possible,” Haarde said. “It is, of course, a matter of responsibility to leave the country out of control and create a cabinet crisis.” A decision is expected to be reached today.

Sigurdsson’s resignation seemed to have come as a surprise to the remaining members of the cabinet. The minister also announced the resignation of Financial Supervisory Authority (FME) director Jónas Fr. Jónsson, who will leave his posts on March 1, and the entire FME board.

Gísladóttir said Sigurdsson’s actions have provided a good example for others and that it was now time for the Central Bank to do the same.

Haarde said it is possible that the lineup in the Central Bank will be changed. “But I’d like to point out that we have been working on that. There is a Finnish expert here who is working on issues regarding the FME. I have discussed the option many times to merge the FME and the Central Bank, at least to some extent.”

“We have also asked the International Monetary Fund to assist us in organizing this system for the future, taking into consideration everything that has happened here in Iceland in the past months. Therefore I don’t believe we should be too rash in this matter,” the PM added.

Gísladóttir said the Social Democrats are not making any demands on the resignation of Minister of Finance Árni M. Mathiesen—that is in the hands of the Independence Party. Gísladóttir also denied that she had discussed forming a new coalition with the leaders of the opposition parties.

Click here to read more about Sigurdsson’s resignation.

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