Iceland government taking time to build solid ground

johanna-og-steingrimurJohanna Sigurdardottir, Iceland’s Prime Minister, told Morgunbladid that the negotiations between her Social Democrats and the Left Green Movement are going well and decisions have already been made in many important areas. The PM hopes that a new coalition government between the two parties can be unveiled at the weekend.

When asked about criticism the parties are receiving for the unusually long time taken to form a government, Sigurdardottir said that despite the delay the country is still being governed effectively for the time being and important projects are still being carried out. “We want to govern for the entire parliamentary term and we therefore need to start out on solid ground,” she said. “Everybody knows there has been a significant divide between the parties on the issue of Europe, so nobody should be surprised that we need to take our time to come to an agreement.” It is not considered unlikely that the talks could take a full two or three weeks, reports.

The new government faces a formidable challenge as it struggles to significantly reduce outgoings without removing essential services from those who need them most. As unemployment and business closures lower the state’s income from taxes, the government remains responsible for massive foreign debts as a result of October’s banking collapse. The new government will, therefore, look for ways to stimulate the economy and help businesses get back on their feet.

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