The privatization of state banks Landsbanki and Búnaðarbanki continues to come under criticism (see Iceland Review, Daily News, May 31, “Privatization of banks draws heavy fire”).
The Prime Minister, Halldór Ásgrímsson of the Progressive Party, has admitted trying to persuade the two groups selected to bid for Búnaðarbanki to work together and join up in a single bid.
The Icelandic National Audit Office announced Thursday last week it would open an investigation into the financial ties between Halldór Ásgrímsson and the S-Group which ultimately prevailed in winning the controlling stake of Búnaðarbanki. Opposition leaders responded by questioning the Audit Office’s independence and asked why the Audit Office hadn’t probed the Prime Minister’s finances in its original investigation in 2003.
Last week, the Budget Committee of the Icelandic parliament Alþingi closed its investigation into the privatization of the banks. The majority of the committee is controlled by the government parties, and it decided to vote for closure without having summoned a single minister to testify. “All the necessary information was made available,” said the chairman of the committee, Magnús Stefánsson of the Progressive Party, in an interview with Morgunblaðið, “and all the questions have been answered.” Opposition members of the committee protested claiming many important issues, including the potential conflict of interest of the Prime Minister, had not been adequately investigated.