Kristrún urges unity at Iceland’s labour congress

Icelandic Prime Minister Kristrún Frostadóttir urged unity within the labour movement, saying it was stronger than any individual union or leader, in an address to the 47th congress of Iceland’s labour confederation, ASÍ. The speech was reported by mbl.is.

Frostadóttir referred to recent disputes within the confederation, saying a united movement was “much bigger than individual unions, one party or any individual leaders in politics or trade unions”. She said disagreements over people and issues were not new, but that the movement’s 110-year history showed it was stronger together.

She also reviewed last week’s agreement between the government and labour-market representatives, describing it as an important step in the effort to curb inflation. “We secured peace in the labour market through a concerted effort. And now we get to work,” she said.

Measures she cited included penalties for wage theft, chain liability on major construction projects, changes to the child benefit system, a rent brake and more public housing. She also listed reduced reliance on inflation-indexed loans, a 2.5 per cent cap on fee increases by the state and municipalities, and a 3.5 per cent cap on pay rises for elected representatives and senior officials until the end of 2028.

If the inflation assumptions behind the agreement fail, 20,000 to 30,000 indebted families would receive one-off interest support averaging 100,000 krónur, she said. Frostadóttir said the measures were intended to support stability as the government sought to deliver a balanced budget for the first time in nearly a decade. She said she believed the agreement could mark a turning point in the fight against inflation.

Frostadóttir thanked outgoing ASÍ president Finnbjörn Hermannsson for their cooperation and his contribution to the agreement. She said further reforms could promote economic and social stability, but stressed that fundamental changes to the rules of the labour market must be made in consultation with the labour movement. She said she had proposed discussing such changes alongside preparations for the next collective bargaining negotiations.

At the end of her address, she urged delegates to focus on what united them, calling for trust to be rebuilt and solidarity strengthened. She also reviewed government work on housing, health care and infrastructure, while saying that substantial challenges remained.