The government and the Association of Local Authorities in Iceland reached an agreement this week to double the government’s contribution to the equalization fund of the local authorities this year and next.
According to Fréttabladid the annual contribution will be increased from ISK 700 million (USD 10.5 million, EUR 7.9 million) to ISK 1,400 million (USD 21 million, EUR 15.7 million).
The five-part agreement includes that the government and the association will cooperate on new suggestions on how to form financial regulations for the local authorities and enable an increased flow of information.
The government and the local authorities aim at cooperating more on wage issues to prevent difference in wages between the state and the local authorities and between the different local authorities.
It has been emphasized in the agreement that the government and the local authorities would come up with a plan on how to cover the expenses of the local authorities and their debt payment.
Chairman of the association Halldór Halldórsson and the managing director of the association Thórdur Skúlason signed the agreement on behalf of the Association of Local Authorities, while Finance Minister Árni Mathiesen and Minister of Social Affairs Magnús Stefánsson signed on behalf of the government.
Halldórsson will introduce the new agreement at the general meeting of the Association of Local Authorities in Iceland today.