After nearly three years together, the International Monetary Fund (IMF) and Iceland will now be parting ways, hopefully forever.
RÚV reports that the IMF conducted its sixth review of the Icelandic economy in Washington this afternoon, and came to the conclusion that they were no longer needed. The IMF will therefore be concluding operations in Iceland, and leaving.
Prime Minister Jóhanna Sigurðardóttir announced the departure at a press conference at Iðnó today, adding that Iceland’s economic recovery is on the right track, with improvements being made on or ahead of schedule. She said that Iceland’s resurrection after the 2008 bank collapse “exceeded all expectations”.
Minister of Finance Steingrímur J. Sigfússon also spoke to reporters, saying that trust in Iceland’s financial stability has been restored.
Minister of Economics and Business Árni Páll Árnason spoke more personally, saying that many people feared cooperation between the IMF and Iceland; that the social welfare system would be cut severely and auterity measures put in place, based on the IMF’s track record in Asia and South America. Árni believes the reason why this did not happen in Iceland is because the loan the IMF provided allowed the government to take more time to fix the budget.
The IMF’s arrival in Iceland was indeed not welcomed warmly by many Icelanders, as they feared the fund would lock Iceland into a state of perpetual debt, as many developing countries have experienced. The departure of the IMF can therefore be considered cause for celebration for more reasons than one.