Viewing cable 09REYKJAVIK29, NEW ICELANDIC PM PLEDGES SUPPORT FOR IMF PROGRAM

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P 051735Z FEB 09
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC PRIORITY 3978
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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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UNCLAS SECTION 01 OF 02 REYKJAVIK 000029 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR/NB, INR-B AND OES/OA (HAYES, PHELPS) 
USDOC FOR NOAA/NMFS WILLIAM HOGARTH 
COPENHAGEN FOR ESTH HUB 
TREASURY FOR LAWRENCE NORTON AND ERIC MEYER 
 
E.O. 12958: N/A 
TAGS: PREL OPDC PGOV ECON NATO SENV IC
SUBJECT: NEW ICELANDIC PM PLEDGES SUPPORT FOR IMF PROGRAM 
 
Refs: A) State 10452 
 B) Reykjavik 25 
 
¶1. (SBU) Summary: In a February 5 courtesy call, new Icelandic 
Prime Minister Johanna Sigurdardottir told Ambassador her government 
is committed to implementing the IMF's recovery program for Iceland. 
 The first task is to rebuild the banking system, including the 
regulatory structure, while also helping Icelandic households 
survive the economic downturn. The government will need to work 
"24-7" to accomplish its goals in the roughly 80 days it has before 
parliamentary elections. The PM said she plans to attend the NATO 
Summit in April and hopes to meet President Obama and Secretary 
Clinton there. On whaling, Sigurdardottir said the government is 
reviewing the previous Fisheries Minister's decision to expand the 
quota for hunting fin whales, and that she has asked the new 
Fisheries Minister to examine the mechanics of how it might be 
overturned. End Summary. 
 
¶2. (U) Ambassador called on Iceland's new Prime Minister Johanna 
Sigurdardottir on February 5 to deliver a congratulatory letter from 
U.S. President Obama (Ref A). Expressing warm thanks and deep 
admiration for President Obama and "what he stands for," 
Sigurdardottir said she looks forward to the possibility of meeting 
the President as well as Secretary Clinton at the NATO Summit to be 
held in Strasbourg this April. Sigurdardottir drew parallels 
between Obama's campaign for change and the changes represented by 
her own government, the first in Icelandic history to be headed by a 
woman and to have an equal gender balance in the cabinet. 
Sigurdardottir claimed the new government is only the third in the 
world to have an equal allocation of cabinet posts between men and 
women. 
 
¶3. (SBU) Sigurdardottir said her government -- which will be in 
office for roughly 80 days before early parliamentary elections this 
spring -- realizes it will need to work "24-7" to accomplish its 
ambitious agenda. The first priority is to reconstruct and 
reorganize the banking sector, with particular attention to 
regulatory bodies such as the Central Bank and the Financial 
Supervisory Authority. This must be done in order to rebuild 
international trust in Iceland, which has been greatly weakened as a 
result of the crisis. At the same time, said this former Social 
Affairs Minister, the government will work to mitigate the impact of 
the economic contraction on Icelandic households. 
 
¶4. (SBU) The PM pledged that her government will fully implement 
the plan worked out with the International Monetary Fund (IMF) last 
fall, which will be the key to Iceland's economic recovery. She 
added that the government intends to stand by all international 
commitments that Iceland has made in connection with the economic 
crisis. 
 
¶5. (SBU) Ambassador raised the topic of bilateral security 
cooperation and the work done by both governments to develop a new 
defense relationship after the withdrawal of U.S. forces in 2006. 
The Ambassador expressed gratitude for the work done by previous 
Foreign Minister (and Chair of Sigurdardottir's Social Democratic 
Alliance party) Ingibjorg Solrun Gisladottir and said she hoped our 
strong bilateral cooperation could continue. The PM said she agreed 
that U.S.-Iceland defense ties have been strong and that continued 
joint efforts would be beneficial. 
 
¶6. (SBU) On whaling, Ambassador noted the decision by the outgoing 
Minister of Fisheries in his final days in office to dramatically 
increase the quota for commercial hunting of fin and minke whales 
(ref B). PM Sigurdardottir said her government had strongly 
criticized the manner in which this was done, in which a minister in 
caretaker status made such a dramatic change to government policy. 
The PM has asked the new Minister of Finance, Fisheries and 
Agriculture to review the legal basis for the quota increase and 
examine how it might be rescinded. She noted that there may be some 
liability concerns for the government arising from companies that 
already hold whaling quotas and could sue for damages. The PM 
further noted that her government has received a large number of 
letters and email messages protesting the decision, many of them 
from the U.S. 
 
¶7. (SBU) Comment and bio note: Sigurdardottir appears to have 
brought the same intensity and seriousness of purpose to her new job 
that she exhibited in her previous stints as Minister of Social 
Welfare -- the very qualities that have made her the most popular 
politician in Iceland. She is focused on domestic issues first and 
foremost, but also showed on the IMF package and whaling that she 
 
REYKJAVIK 00000029 002 OF 002 
 
 
understands the outside world cannot be ignored while Iceland looks 
inward. Of note, although Sigurdardottir is fluent in English, she 
chose to speak in Icelandic and use an interpreter. 
 
VAN VOORST