Iceland’s PM: Icesave Will Decide the Coalition’s Fate Skip to content

Iceland’s PM: Icesave Will Decide the Coalition’s Fate

If the two coalition parties, the Social Democrats and the Left-Greens, are unable to reach a decision on how to progress in the Icesave matter by the end of this week their cooperation in government will automatically be terminated, Prime Minister Jóhanna Sigurdardóttir concluded after a cabinet meeting yesterday.

Prime Minister of Iceland Jóhanna Sigurdardóttir. Photo by Geir Ólafsson.

According to Fréttabladid’s sources, Sigurdardóttir and other ministers believe that they cannot rely on the support of any of the opposition members should the Icesave legislation be up for another vote in parliament, which is deemed likely, and therefore all members of the coalition parties must vote in favor of it.

The fate of the coalition is therefore once again in the hands of Minister of Health Ögmundur Jónasson of the Left-Greens and his comrades within the party, who have expressed doubts on the Icesave legislation, as they did when the legislation was first voted on in August.

“The prime minister’s declarations do not pass me by,” Jónasson told Fréttabladid but would otherwise not comment on them, apart from saying that the matter remained unresolved and that it was clear that the Althingi parliament had to vote on it again.

The parliamentary parties of the Social Democrats and the Left-Greens will meet today in an effort to solve the issue in reconciliation. An additional cabinet meeting may also be held because of the Icesave dispute.

In August, preconditions were introduced to the government’s original bill on a state guarantee for the loans, which the British and Dutch state have agreed to provide to Iceland’s Guarantee Fund so that Landsbanki’s Icesave depositors in the UK and the Netherlands can be compensated.

British and Dutch authorities did not fully approve of the preconditions, requesting, for example, that the state guarantee remains valid until after 2024.

Minister of Finance Steingrímur J. Sigfússon will meet his British and Dutch counterparts at the general meeting of the International Monetary Fund in Istanbul next week. There he will try to finalize the Icesave negotiations between the Icelandic, British and Dutch governments, probably in the form of an appendix to the agreement.

Informal discussions on Icesave between the three governments have been taking place for the past weeks.

Click here to read more about Icesave and the IMF.

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