ICELAND’S NEW interim government was sworn in yesterday with Social Democrat (SDA) prime minister Johanna Sigurdardottir vowing social measures and economic continuity ahead of elections on April 25th.
The two-party minority government with the Left-Green Movement has promised to honour an agreement reached in November with the International Monetary Fund, a month after the collapse of the country’s banking system.
The financial shock waves continue to shudder through the island economy: unemployment and inflation are rocketing and trading in the currency has been effectively suspended.
Yesterday the new administration promised urgent measures for families struggling with foreign-currency mortgages and businesses battling unpaid bills. Efforts to rebuild the nationalised banking system will follow.
“The new government will be based on social values,” said Ms Sigurdardottir (66), one of the country’s most experienced politicians and the first woman to hold the office of prime minister.
The temporary government has no illusions about the challenges it faces, warning of “considerable and rapidly increasing foreign debts and liabilities of the national economy”.
Two non-MPs have been awarded the business and justice portfolios while Ms Sigurdardottir promised additional measures “in favour of increased democracy”.
It was a belated nod of acknowledgment to three months of angry street protests that toppled Iceland’s government a week ago.
The cabinet went to work immediately, replacing the central bank board of governors blamed for failing to control the nation’s banks running up debts 10 times the gross domestic product.
