All opposition parties seem to agree that the government is not prioritizing correctly with the debt write-off actions presented at a press conference yesterday, ruv.is reports.
As reported yesterday, the average write-off under the government’s debt cancelation plan, which aims to correct indexed mortgages for the effects of inflation in 2008 and 2009, will be ISK 1.35 million (USD 11,000, EUR 8,800) per household.
Leader of the Pirate Party, Birgitta Jónsdóttir, has said that she respects the efforts but that they are unfortunately built on sand.
Leader of the Left-Greens Katrín Jakobsdóttir said that nothing new had been announced at the press conference. “The principles are the same, that they have been using our funds from our joint funds collected through the taxation system and it is being prioritized in this way. These funds are not being used to pay down national debt or to support the health and education systems.”
While acknowledging that many people will welcome improvements to their private mortgage situation, Katrín said that there are also many people who will not receive a write-off but are also in a difficult financial situation, as well as people who will receive a write-off without a specific need for it financially.
Chair of the Social Democrats Árni Páll Árnason criticized the government for not having given clear answers on how many people would, in reality, get out of trouble with the debt relief plan. He pointed out that Statistics Iceland had received unprecedented permission to research people’s debt situation, yet nothing had been done.
Spokesperson for Bright Future Guðmundur Steingrímsson said public debt needs to be paid urgently and funds should be directed into the healthcare system, which has been subject to cutbacks, as well as to education, roads and other infrastructure. “This money, which belongs to all of us, is now being used for this [the write-offs] instead of necessary development.”
Birgitta highlighted the fact that the original proposal from the government was that the money would come from foreign hedge funds rather than public funds. “I’m also worried that the food tax will eat up this and I worry about those who receive no write-offs. But I don’t know how large the sums are. If they are ISK 5,000 then this makes no difference given the losses that people have suffered.”
The cancelation of household debt was Prime Minister Sigmundur Davíð Gunnlaugsson’s Progressive Party’s big election promise. Sigmundur said at the press conference that such a large and complex project was rare and that it would be resolved in a short period.