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Government's extensive debt relief program to be announced next week

Sigmundur David Gunnlaugsson, the prime minister of Iceland Sigmundur David Gunnlaugsson, the prime minister of Iceland

Sigmundur David Gunnlaugsson, the prime minister of Iceland, has announced the rise of the middle class. He says that the government's proposal for a debt relief program for households will be announced next week.

The prime minister says that a group of 20 specialists has been working on the proposals for debt relief. The have been estimating assumptions, plans of execution and economical consequences of debt relief actions.

Some idea have been mentioned regarding the central bank financing debt relief to some extent. For that to be possible, laws regarding the central bank have to be changed. Specialists within the central bank said that if these laws are changed, so that the central bank can finance debt relief, then that would instantly put the government's credit rating below investment grade.

Before the parliamentary elections, in April earlier this year, the Progressive Party promised 20% flat debt relief of household's price indexed mortgages. They planned to finance that with money from the foreign creditors of the fallen Icelandic banks. Now it looks like that money will be hard or impossible to get, so other ways are being explored.

The prime minister said that the parliament would receive the proposals, discuss them and write bills based on them. The prime minister added that the main thing is that as soon as the proposals are announced, people can actually calculate what effect they will have on their personal budget.

 

Last modified on Sunday, 24 November 2013 13:33

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