PM Discusses Economic Difficulties at Parliament Skip to content

PM Discusses Economic Difficulties at Parliament

Prime Minister Geir H. Haarde discussed the economic difficulties Iceland is facing in his keynote speech at the Althingi parliament yesterday, promising that the government will do everything in its power to secure economic stability.

“It will take the international financial community and the world economy a long time to recover and everything indicates that the situation will worsen until we will see the shore,” Haarde said, as reported by Fréttabladid.

Haarde also discussed the state’s acquisition of the majority of shares in Glitnir Bank, stating that this was not the last misfortune that will befall the Icelandic bank system.

“Icelandic banks, like all other banks in the world, are up for a great defensive fight with the aid of governments and public institutions. I assure you that my government will never stray away from its policy of securing economic stability in every way possible and will make the sacrifices necessary,” the prime minister stated.

Minister for Social Affairs Jóhanna Sigurdardóttir criticized bank leaders in her speech, claiming the internationalization of their operations was characterized by rashness rather than foresight. The system of stock options was likely to have increased their risk appetite too greatly, she said.

“Greed unfortunately controlled their actions and with sky-high salaries they lost the moral connection with the nation. They will have to learn from their mistakes,” Sigurdardóttir said.

Leaders of the opposition parties reprimanded the government for lack of actions to improve the economic situation and made it responsible for the situation to a large extent. The government could not hide behind the international credit crunch, they said.

Leader of the Left-Greens Steingrímur J. Sigfússon recommended that the leaders of political parties, financial institutes and the economy should be called to a meeting immediately to discuss the economic problem and propose joint solutions.

“In the coming days Iceland’s government will have to answer whether it has faith in itself, the capacity and strength, courage and self-confidence to lead restoration operations in our national economy,” Sigfússon said in his speech.

Leader of the Progressive Party Gudni Ágústsson said it is necessary to drop the policy rate considerably, from 15 to five percent, before Christmas, while leader of the Liberal Party Gudjón A. Kristjánsson said a large loan was necessary to strengthen the foreign currency reserves of the Central Bank and strengthen the ISK.

The opposition parties all declared that they were willing to cooperate with the government on solving the economic problem.

Click here to read more about that problem.

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