Icelanders promised increased public spending with new PM

4 Dec 17

Iceland’s Left-Green opposition leader will become the new prime minister as a coalition government is formed.

Katrin Jakobsdottir campaigned during the snap election to restore trust in government and increase public spending.

Her party emerged as the second biggest party in the parliamentary elections on 28 October and will lead the coalition government with the right-wing Independence Party and Centre-right Progressive Party.

She failed to form a left-leaning government last month but had said on election night she was open to forming a broad-based government, Reuters have reported.

Both the Left-Green party and the Independence party stressed the importance of investment in areas like welfare, infrastructure and tourism, although they do not agree on how it should be financed.

The Left-Greens said it should be through higher taxes on the wealthy, real estate and the fishing industry, while the Independence Party thought money should be taken from the banking sector to fund infrastructure spending.

Katrin Jakobsdottir

The current prime minister Bjarni Benediktsson will become the finance minister.

He called the snap election in September following a scandal involving his father, which prompted a government ally to drop out of his ruling coalition, after less than a year in government.

Benediktsson’s father tried to clear the criminal record of a convicted sex offender.

The small country of 340,000 people was hit hard by the financial crisis in 2008, but has made strong recovery, particularly because of a tourism boom.

Earlier this year, Iceland was named the fastest growing economy amongst OECD members. 



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