Sigmundur Davíð accuses government of worsening inflation

Sigmundur Davíð Gunnlaugsson, leader of Iceland’s Centre Party, said during a debate on the prime minister’s policy address at Alþingi on Wednesday that the government’s account of conditions in society did not add up, mbl.is reported.

“This is quite a situation. It is not just one thing, it is everything,” Sigmundur said.

He said the governing parties had been elected on promises to bring down interest rates and inflation. However, he said the government had barely taken office before introducing measures that increased the public’s financial burdens and hindered the creation of economic value.

According to Sigmundur, this year’s budget showed that the government had little understanding of how the economy and households functioned. He said decisions had continued to move society in the wrong direction.

Earlier this year, he said, the government had held a press conference to announce that it was giving up and putting its “hammer” aside. The government had said it would ask the European Union whether it could help lower interest rates and inflation in Iceland.

Unlike similar efforts in other countries, Sigmundur said, the request in Iceland had not concerned a desire to join the European Union but was instead an attempt to seek offers.

After the result of the referendum became known, Sigmundur said, a new chapter began. He said the government’s response had not been marked by humility or an understanding of the public’s position.

“All talk of respecting the will of the people disappeared like dew in the sun,” he said, adding that the tone had changed to one of disappointment and anger.

Sigmundur said next year’s budget was primarily a reminder of the government’s surrender, but also showed that it had failed to learn from experience. He said taxes and other charges on the public and businesses would be increased.

“A 5.2% increase in expenditure indicates that the minimum inflation next year will be 5.2%. That is the state’s message,” he said.

Responding to the prime minister’s statement that promises had been made and kept, Sigmundur said: “No, the nation was tricked.”

He said the only promises that had been honoured were commitments made by one or two political leaders to a third in order to gain power. “That promise was kept, and we are left with the consequences,” he said.

Sigmundur said it was possible to keep the genuine promises and meet the public’s expectations, but that this would require a new government.