Iceland’s finance minister, who resigned this week on conflict-of-interest grounds, will swap positions with the nation’s foreign minister, the government announced on Saturday.
(Bloomberg) — Iceland’s finance minister, who resigned this week on conflict-of-interest grounds, will swap positions with the nation’s foreign minister, the government announced on Saturday.
Thordis Kolbrun Reykfjord Gylfadottir, foreign minister since 2021, takes over at the finance ministry from Bjarni Benediktsson, who quit in a scandal over the sale of the state’s shares in Islandsbanki hf, where his father was among the investors.
His resignation stirred speculation on the viability of Iceland’s three-party coalition, which joins the Independence Party on the right, the Left Green movement on the left, and the Progressive Party in the center.
See also: Iceland’s Finance Minister Quits Over Islandsbanki Sale
“We are in the second half of this term and ahead are enormous tasks,” Prime Minister Katrin Jakobsdottir said at a press conference in Rejyavik. She told Bloomberg she doesn’t rule out other changes to her coalition, but that no decisions have been made.
“We will rise under the responsibility we took two years ago and finish these tasks,” Jakobsdottir said, adding that the government “stands on firm ground.”
Iceland’s high inflation and tricky wage negotiations are among the tasks ahead, the PM said. Iceland has Western Europe’s highest interest rate, at 9.25%.
Benediktsson defended the move to simply change positions with Gylfadottir, which was criticized by Iceland’s opposition as inadequate. given the conflict of interest breach. A majority of respondents in a Gallup poll also had a negative opinion on the job-swap.
“It is out of the question for the chairman of the Independence Party — which started this coalition — not to follow through with it. In my opinion that would be a recipe for unrest and instability,” Benediktsson said as he announced his replacement. Gylfadottir is vice chair of the Independence Party.
Iceland’s government plans to sell more shares in Islandsbanki. In stepping down this week, Benediktsson said he wanted to create “trust” and “peace” for the work ahead.
Benediktsson is a former prime minister quit in 2017 over a failure to inform the rest of the government that his father had written a letter vouching for the character of a convicted child molester.
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