From Iceland — Coalition Gives Progress Report

Coalition Gives Progress Report

Published May 6, 2009

Prime Minister Jóhanna Sigurðardóttir, Minister of Business Gylfi
Magnússon and Minister of Finance Steingrímur J. Sigfússon held a press
conference yesterday outlining some of their aims for the Social
Democrat/Leftist-Green coalition.
According to Morgunblaðið, Magnússon told reporters that he believes there is room to bring the nominal interest rate down as fast as inflation. He said he would support a bold lowering of interest rates from the Central Bank. A decision on interest rates is expected on Thursday. The Prime Minister added that she could see policy rates drop to 2-3% by the end of the year.
Sigfússon told reporters that talks with the British over the Icesave fiasco should resume by mid-May. He also announced that just that morning, a proposal had been sent to the Central Bank to establish a consumer representative for proposed emergency legislation regarding real estate loans.
All agreed that with further discoveries on the state of the real estate market and household debt, they have a clearer picture of what actions can be taken to keep consumer debt from spiralling out of control. Interestingly, they responded to yesterday’s new story that an agreement had been reached between the two parties with regards to the EU by declining to comment precisely, but said they were very optimistic that an agreement would be reached by this weekend.

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