From Iceland — Íslandsbanki Sale: Pressure On Finance Minister To Resign

Íslandsbanki Sale: Pressure On Finance Minister To Resign

Published April 20, 2022

Andie Sophia Fontaine
Photo by
Hörður Sveinsson

Minister of Finance Bjarni Benediktsson is now facing increased calls for his resignation in the wake of the sale of shares in Íslandsbanki, which the government admitted yesterday has been deeply flawed.

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Íslandsbanki has been owned by the Icelandic treasury since the wake of the 2008 financial crash, but Bjarni has been very keen on selling shares of the bank to private interests again. The most recent sale of shares amounting to a 22.5% stake in the bank has caused considerable criticism, not least of all when it was revealed that one of the share buyers in the closed and discounted sale of shares was none other than Bjarni’s father.

The law is clear

While Bjarni has denied any knowledge that his father was amongst the buyers, the law on selling government shares of financial institutions outlines the process for this sale. Article 4 clearly details: “When an offer [to buy shares] is submitted, Icelandic State Financial Investments [ISFI] submits the offer to the Minister with the reasoning for the sale. The Minister decides whether the offer will be accepted or denied and signs the agreement on behalf of the government on the sale of the shares.”

This being the case, either this process was not followed, the Minister did not review the share offers very carefully, or the Minister was less than forthcoming about his knowledge of his father’s role in the sale.

Calls for resignation begin

While the government announced yesterday that ISFI would be shut down and the sale process would be postponed until new legislation on the sale could be drafted, with an investigation into the sale thus far to be conducted by The Icelandic National Audit Office (INAO) and the Central Bank, many have pointed out not only the aforementioned law, but also the fact that ISFI is under the auspices of the Finance Minister. As such, numerous members of the parliamentary opposition have called for Bjarni to resign.

“If ISFI messed up, then it’s because of the regulations that it received from the government,” Reform Party MP Sigmar Guðmundsson wrote in a column that appeared on Vísir. “There is no escaping that.”

Social Democrat MP Helga Vala Helgadóttir pointed out on Facebook that Bjarni has either been incompetent in his role in the sale, or has been less than truthful about it, which either way means he must resign.

Pirate Party MP Þórhildur Sunna Ævarsdóttir has been of much the same mind, saying: “Bjarni Benediktsson bears a clear legal responsibility for the entire process, but once again [the government] will strike down a law that was not followed in order to bury the crime in the ruins.”

Ruling coalition holding the line

For their part, ISFI has confirmed that every part of the sale process thus far has been conducted in full harmony with and the knowledge of Bjarni.

Nonetheless, Bjarni is adamant that he has done nothing wrong, telling listeners of the radio show Reykjavík Siðdegis: “I have not seen anything that tells me that the law has been broken. I have not seen anything, but we cannot continue working in the shadows or under a cloud of doubt, and that’s why [the sale] is being reviewed.”

Prime Minister Katrín Jakobsdóttir has not gone so far as to absolutely deny that Bjarni should resign, but has said instead that “we should wait for the result of the investigations that are still pending.”

Most Icelanders dissatisfied with sale

A poll conducted by Prósent for Fréttablaðið shows that the vast majority of Icelanders–about 83% of those polled–are unsatisfied with how the sale of Íslandsbanki shares has gone so far.

There is no deadline for when INAO and the Central Bank will conclude their investigations and submit their findings. In the meantime, the Finance Minister remains the focal point of criticism in what has been arguably the largest financial scandal in Iceland since the Panama Papers.

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