Cuts to Iceland’s Healthcare and Journalism “Dangerous” During Pandemic

Iceland National Hospital COVID-19

While Iceland’s government has increased investment in some areas to combat the economic effects of the COVID-19 pandemic, some of its key institutions are facing cuts. These include the National University Hospital and national broadcaster RÚV. Cuts at both institutions have been criticised as “dangerous” by MPs and interest groups. RÚV reported first.

Hospital Cuts to Affect Service

RÚV reported last week that next year’s government budget demands the National University Hospital cut costs by ISK 4.3 billion ($31.7 million/€26.7 million). The hospital has operated at a loss over the last several years, and has a cumulative deficit of ISK 3.8 billion ($28 million/€23.6 million). The hospital’s administration has requested that the cuts be spread over a three-year period, but that would still require the institution to cut operating costs by ISK 1.4 billion ($10.3 million/€8.7 million) next year.

MP Logi Einarsson, who is chairman of the Social Democratic Alliance, expressed his opposition to cuts to the hospital, saying “it is dangerous to impose strict austerity and streamlining demands on healthcare in the middle of a pandemic and the Parliament needs to change this.” According to Logi, the cuts would make it difficult for the National University Hospital to fulfil its role as the country’s main hospital and to cut down existing waiting lists for surgeries and other procedures.

A subsequent press release from the government stated that RÚV’s figure was incorrect, and the cuts required of the hospital next year will amount to ISK 400 million ($2.95 million/€2.49 million). “On the other hand, the hospital will receive ISK 1.3 billion to address the growth in population and the increase in the relative number of elderly people, as well as additional funding to address salary and price hikes. It is also clear that Landspítali will be compensated for increased expenses due to the COVID-19 epidemic.”

Journalists Let Go at RÚV

The hospital is not the only government-funded institution facing cuts in Iceland. National broadcaster RÚV will lay off around one fifth of the journalists in its news department due to reduced funding and some of the layoffs have already taken effect. The Society of Broadcast Journalists (the union for broadcast journalists who work at RÚV) has criticised the cuts. A statement from the institution reads, in part: “When the media’s ability to engage in critical journalism is reduced, there is a risk that the public’s access to accurate and clear information will be reduced. This is especially dangerous in times where misinformation is rampant.”

The statement goes on to say that those who have been let go are “high-quality journalists, including an employee with more than a quarter of a century of service at the agency.” This employee is one of several that is in an ongoing dispute with RÚV concerning overtime pay. In its statement, the Society of Broadcast Journalists questions the decision to let the employee go before the issue has been resolved.

This article has been updated to include the government’s response to RÚV’s original story on cuts to hospital services.

Salaries of Government CEOs Under Scrutiny

Bjarni Benediktsson

Bjarni Benediktsson, Minister of Finance and Economic Affairs, echoes statements made by other officials concerning the excessive pay raises of Lilja Björk Einarsdóttir, CEO of Landsbankinn, Kjarninn reports. “As far as I can tell, instructions made in early 2017 have not been heeded,” a disappointed Bjarni says.

The instructions Bjarni refers to were made by then Minister of Finance and Economic Affairs, Benedikt Jóhannesson, after it was decided in early 2017 to exempt government officials from decisions made by parliament’s salary council. At the time Benedikt urged all CEOs of government entities to show modesty in pay raises in the future. Instead, many have run amok.

Salaries of CEOs became a hot topic in Iceland this week after it was revealed that Lilja Björk Einarsdóttir, CEO of government owned bank Landsbankinn had managed to raise her monthly salary to 3.800.000 ISK, meaning that her pay increased by 82% in two years.

Lilja, however, is not the only one to have received a hefty pay raise. After being freed from parliament’s control, salaries of the head of The Icelandic National Broadcasting Service were raised by 16% to 1.8 million ISK a month, the salary of Isavia’s CEO were raised by 20% to 2.1 million ISK and the salary of the National Power Company of Iceland’s CEO were raised by 32% to 2.7 million ISK.

Bjarni Benediktsson says he has now sent a letter to all government CEOs, asking them to explain just exactly how they have followed Benedikt Jóhannesson’s instructions. He has said he will give everyone a chance to explain themselves, but does not exclude the possibility of parliament intervention in the future.