Unfolding Story: Did the Prime Minister Tell the Truth? Skip to content

Unfolding Story: Did the Prime Minister Tell the Truth?

The Governor of the Central Bank of Iceland was in direct e-mail communications with the Prime Minister of Iceland, Jóhanna Sigurdardóttir, about his salary and possible pay-cut, according to mbl.is. Shortly before he was appointed to the position he said in an e-mail to the Prime Minister that if he were to face a 37% pay-cut he would likely withdraw his application. He said he was hopeful that the Prime Minister would find a solution.


Jóhanna Sigurdardóttir. Photo: Páll Kjartansson, Iceland Review

According to the website mbl.is, Morgunbladid has gained partial access to the e-mail communications between the two. In an e-mail to the Prime Minister dated June 21 2009, Gudmundsson said: “Official salaries obviously mean that I will have to take a great reduction from what I am being paid now. I also realize that on top of that there might be a further reduction of spendable income due to changes in taxes. I am, however, willing to accept that.”

He goes on: “I hope that I will hear from you tomorrow or Tuesday and hope that you will find some solution to this difficult problem.”

Three days later, June 24, 2009, Lára V. Júlíusdóttir, Chairman of the Board of the Central Bank sent an e-mail to Ragnhildur Arnljótsdóttir, Permanent Secretary in the Prime Ministers office saying: “I am enclosing a proposal for salaries. Here everything is listed and I try to keep thing simple. It is easy to explain that the chairman of the Monetary committee [a position filled by the Governor of the Central Bank] be paid extra for all that work instead of starting to pay again for taking part in board meetings.”

On June 26, 2009 Gudmundsson was hired as Governor for the next five years.

On May 4 2010 icelandreview.com reported the following: “According to the sources of ruv.is, before Gudmundsson accepted the position at the Central Bank, he made an agreement with Prime Minister Jóhanna Sigurdardóttir that he would receive a salary comparable to that of his predecessor, Svein Harald Oeygard. Thus, the pay raise proposal was to fulfill the PM’s promise.

Sigurdardóttir commented to Stöd 2 yesterday that she has not made any promises regarding the salary of the Central Bank governor; his salary will be determined on the basis of the wage council law.”

According to website pressan.is Andrés Jónsson, a public relations man and former chairman of the young Social Democrats (the Prime Ministers party) claims that it seems that the Prime Minister has not told the truth in the media and in Althingi, Iceland’s Parliament.

He goes on to say: “As always it is the cover-up that leads to the most serious consequences.”

Read more: 04.05.2010 Icelandic Central Banker Promised Higher Salaries?

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