Finance minister makes rebuilding economic trust top government task

Rebuilding trust in economic policy is one of the government’s most important tasks, Finance Minister Daði Már Kristófersson said in a speech to Iceland’s parliament, Alþingi, on Wednesday evening. The remarks were reported by mbl.is.

“Iceland’s greatest challenge has always been a lack of trust in the management of economic affairs,” Daði Már said during a debate on the prime minister’s policy address.

He said this lack of trust had contributed significantly to unnecessary economic fluctuations, causing harm to both households and businesses. He described it as a recurring feature of Iceland’s history since the country became independent and said it had to change.

Daði Már said trust could be rebuilt through responsible economic management, fair rules, discipline and consistency, both in good times and bad. The government’s economic objectives had to be clear, and ministers needed to take responsibility and have the courage to set priorities based on long-term interests.

He identified three main conditions for credible economic policy in Iceland: strong value creation, sustainable state finances and a stable króna. He added that confidence in a stable currency could only be achieved if it rested on trust in the government’s economic policy.

Without that credibility, Icelanders would continue to face fluctuations in inflation and high interest rates, he said. He argued that economic management must therefore remain a top priority.

Daði Már said neighbouring countries had all managed to reduce economic fluctuations through responsible management. Iceland should therefore put economic discipline first and invest in long-term stability, he said.

He acknowledged that the task would not be simple or easy, and that difficult decisions were sometimes necessary to prepare for the future. The government was convinced that lower inflation and lower interest rates would provide the greatest benefit for households and businesses, he said.

“A balanced budget is by far our most important contribution to making that a reality and, at the same time, creating the conditions for stability in the future,” Daði Már said.