Reykjavík City Concerned about Financial Situation Skip to content

Reykjavík City Concerned about Financial Situation

By Iceland Review

The total debt of Reykjavík City, which primarily has loans in foreign currencies, mostly in euro, has risen by more than ISK 10 billion (USD 121 million, EUR 77 million) since last year. At the same time the city’s income has dropped and the City Council is concerned about this development.

“We are very worried about this situation, especially since the revenue of the Reykjavík Municipal Treasury will decrease compared to original estimates […] by two billion [USD 24 million, EUR 15 million] this year,” Vilhjálmur Th. Vilhjálmsson, chairman of Reykjavík City Council, told Morgunbladid.

“At the same time our expenses are increasing considerably,” Vilhjálmsson said. “Projects will be reduced somewhat. But we still have obligations to construct schools and sport halls and we will not reduce social services for those who require assistance the most. But it is clear that we have to lower expenses.”

Reykjavík City owes ISK 155.4 billion (USD 1.9 billion, EUR 1.2 billion) in total, mostly because of projects undertaken by Reykjavík Energy (OR) and because of loan taking in foreign currencies.

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