Success noticed internationally

The economic situation in Iceland and the progress that has been achieved formed a significant part of Prime Minister Sigmundur Davíð Gunnlaugsson's policy address to the country's parliament yesterday evening.

He said targeted fiscal and economic policies had yielded results that were noticed internationally. Growth forecasts were good, real wages were rising and inflation was below the target of the Central Bank of Iceland and had remained there for seven consecutive months. Similar progress had not been achieved for over a decade. "This is a success that few if any European countries can boast of at the moment and even farther afield."

The Prime Minister also spoke of the measures introduced by the government in matters of household debt. Most of the measures had already been put into action or were well underway. More than 69 thousand households had applied for debt relief under the program which he said should be something to think about for the opposition MPs who had fought fiercely against the measures being implemented.

Regarding the capital controls in Iceland the Prime Minister stressed that the government would not accept any solutions regarding that matter which would result in a further deterioration of living standards in the country. A solution would be reached in consultation with key stakeholders in the community which would be both economically possible and socially acceptable. International experts had been hired to secure such conclusion.

The Prime Minister said he expected that recommendations on how best to remove the capital controls would be introduced to the parliament in the coming months. This should in turn help with the work of settling the estates of the failed Icelandic banks which needed to be in full compliance with Icelandic laws and international insolvency rules while being at the same time consistent with economic stability in Iceland and future growth.

The Prime Minister's speech in full (in Icelandic)