Bank Collapse Costs Government Billions - The Reykjavik Grapevine

Bank Collapse Costs Government Billions

Published October 9, 2009

The rescue of the collapse of Iceland’s banks will end up costing its government 2.4 billion ISK (about 19 million USD).
RÚV reports that according to the latest budget bill, the figure indicates the government’s direct responsibility in stabilizing the banks. Residual effects onto other aspects of society, however, cost much more. For example, an extra 8 billion ISK will be needed to be added for unemployment payments.
Other highlights from the budget include a 2.3 billion ISK rescue package for households deeply in debt. The money from this package will be used to pay down interest rates on mortgages, among other things. By contrast, a new plane for the Coast Guard will cost 3 billion ISK.
This year’s budget was expected to be controversial, as the government struggles to make cuts without cutting too deeply to help heal Iceland’s recovering economy. Discussions before parliament over the bill will be ongoing.

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