New Government Takes Office – Social Democrats and Left-Greens Continue their Coalition Partnership

A new coalition government, formed by the Social Democrat Alliance and the Left-Green Movement, formally announced today at a press conference held at the Nordic House in Reykjavik, will continue the two parties’ partnership. Following the outcome of national elections two weeks ago, these parties now hold a majority of seats in the Icelandic parliament, Althingi.

The two party leaders, Prime Minister Johanna Sigurdardottir and Finance Minister Steingrimur J. Sigfusson, presented the government’s platform, which sets out its goals and ambitions in a comprehensive policy statement, and explained its short-term agenda. The government’s central aim is to rebalance the state budget by 2013 while at the same time implementing an ambitious plan of job creation and innovation to restore Iceland’s position among the most energetic and competitive states in the world by 2020.
Parliament to decide on EU accession application

The two parties have agreed to disagree on the EU issue but both parties emphasise their joint intent that it be the nation which, in a referendum, will finally determine whether Iceland will join the European Union. The Minister of Foreign Affairs will present a parliamentary resolution on EU membership at the upcoming summer session. It calls for the Althingi to decide whether Iceland will commence accession negotiations with the EU.
Commitment to IMF program reaffirmed

The government is committed to the implementing the Economic Recovery Program agreed with the IMF and will continue its close co-operations and consultation with the Fund, aimed at restoring the economy and rebuilding trust on international financial markets.
Longer-term goals

* A national consensus will be sought for a stability pact, and a plan presented for achieving fiscal balance in coming years.
* The number of ministries will be reduced from 12 to 9 during the government’s term in office.
* A comprehensive assessment will be made of the need for further actions to assist households and proposals drafted in consultation with the social partners.
* Corporate debt adjustment and restructuring will be expedited.
* Ten specific urgent employment measures presented.
* An action plan to boost industry and improve the quality of life will be prepared for all regions of Iceland.
* An overall revision of the Act on Fisheries Management carried out, in accordance with the coalition parties’ platforms.
* A special constitutional congress will be elected in tandem with upcoming local government elections.

100-day agenda released

The government has drafted an agenda for the next 100 days, listing the urgent measures which need to be taken to tackle the difficult economic situation, for the benefit of households and businesses. These include measures to finalise the recapitalisation and the restructuring of the banking system, negotiations with foreign creditors and governments, legislative proposals introducing democratic reform, finalisation of medium-term fiscal policy and increased efforts in job creation to fight unemployment.
Cabinet Changes

Eight of the ten cabinet ministers of the minority government will continue in office. The two non-political ministers will remain in the cabinet. Four new ministers have been appointed, two from each party, although this will not mean any transfer of ministries between the parties, as some ministers formerly held more than one post in the minority government.

(Government press release)