Iceland’s PM Disagrees with IMF

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Iceland’s PM Disagrees with IMF

Prime Minister Sigmundur Davíð Gunnlaugsson has refuted International Monetary Fund (IMF) mission chief to Iceland Daria Zakharova’s comments yesterday that the Icelandic government’s debt cancellation plan aimed at helping homeowners was flawed.

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Photo: Páll Stefánsson/Iceland Review.

Zakharova said in an interview that the plan would increase inflation and state debt, bloomberg.com reports. 

“The household debt relief program will increase risks related to the Housing Financial Fund (HFF), because it will increase prepayments of mortgages held with the HFF,” Zakharova said. “This will further aggravate its negative carry and it will require increased capital injections from the budget.”

Sigmundur commented that IMF policies may be good for business but have not proven good for individuals, ruv.is reports.

Related:

04.12.2013 | Half Satisfied with Debt Relief Plan

03.12.2013 | Explaining Iceland’s Debt Relief Plan

30.11.2013 | Icelandic Government Presents Debt Relief Plan

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