Geir H. Haarde, the former finance minister who yesterday became foreign affairs minister, said that it was important to show moderation and not waste money in foreign affairs. He said that he was going to use the next few days to find out if there was a way for Iceland to seek a seat on the UN Security Council without spending as much money as previously planned.
Geir said that similar to Davíd Oddsson, whom he succeeded as minister, he will show restraint when it comes to spending, but he still wants to participate in international matters “with respect”.
In prime minister Halldór Ásgrímsson’s term as foreign minister (1995-2004 ) expenditures grew substantially. From 1996 to 2002 expenditures increased 170% while the consumer price index increased by 26%.
The additional expenditures were in part caused by new Icelandic embassies opened around the world. For example, in 2003, the Icelandic National Broadcasting Service, RÚV, reported that the initial expense of Iceland’s embassy in Japan had amounted to ISK 700 million while yearly operational expenses were estimated as ISK 100 million. But even so, reported RÚV, Iceland’s trade with Japan decreased.
Last year, Tryggvi Thór Herbertsson, director the Institute of Economic Studies at the University of Iceland, pointed out that it was sensible to cut costs in the foreign service in order to anticipate planned tax cuts. Prime minister Halldór Ásgrímsson reacted by saying that economists should worry about economics and let politicians worry about politics.