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Cablegate: Ministerial Changes in Iceland

VZCZCXYZ0260
RR RUEHWEB

DE RUEHRK #0175 2781537
ZNR UUUUU ZZH
R 051537Z OCT 09
FM AMEMBASSY REYKJAVIK
TO SECSTATE WASHDC 4180

UNCLAS REYKJAVIK 000175

STATE FOR EUR/NB

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL IC
SUBJECT: MINISTERIAL CHANGES IN ICELAND

1. (U) On October 1, the division of responsibilities within
several Ministries changed as part of the ruling coalition's effort
to streamline the government. Plans for the changes began May 10
when the Social Democratic Alliance and the Left-Green Movement
formed their coalition and announced intentions to reduce the number
of Ministries. The Icelandic parliament passed legislation
September 3 to implement some of these ministerial changes. An
official at the Prime Minister's Office told EmbOff that, the
process is not complete.

2. (U) Four ministries were renamed to reflect more accurately
their new roles. The Ministry of Business Affairs became the
Ministry of Economic Policy and Business Affairs. The Ministry of
Justice and Ecclesiastical Affairs is now the Ministry of Justice
and Human Rights. The Ministry of Communications is now the
Ministry of Communications and Municipal Affairs. The Ministry of
Education is the Ministry of Education and Culture.

3. (U) The Ministry of Economic Policy and Business Affairs
strengthened its role and assumed responsibilities from other
government offices and has the lead on setting economic policy. It
now oversees the Central Bank and Statistics Iceland, which both
previously came under the Prime Minister's office. The Economic
Department of the Ministry of Finance, responsible for surveys of
the economy and fiscal revenue forecasts, joined Statistics Iceland.
The Ministry of Economic Policy and Business Affairs also took over
the Ministry of Finance's responsibility for rules on auditing,
bookkeeping and annual reports. According to an official from the
Prime Minister's office, the changes leave the Ministry of Finance
with no policy formulation responsibility, but management of such
government assets as the State Broadcasting Agency and the
quasi-government agency in charge of the former NATO base. Also
under the Ministry's control is the State Bank Handling Company,
established by legislation in August to manage the State's shares in
financial institutions. The Ministry of Justice and Human Rights
assumed responsibility to administer municipal elections and real
estate valuations and also now handles consumer protection, which
various ministries had previously shared.

4. (U) The September 3 law renaming and reallocating
responsibilities among ministries, however, only implements part of
the government's planned changes. The coalition agreement states
that the government also intends to merge all of the "occupational"
ministries, presumably the Ministry of Industry, the Ministry of
Agriculture and the Ministry of Fisheries into one Ministry and to
merge the Ministry of Communications and Municipal Affairs with the
Ministry of Justice and Human Rights. The agreement also identifies
goals of strengthening the leadership role of the Prime Minister's
Office, increasing cooperation between ministries and increasing the
government's cooperation with labor market parties and other
interest groups.

WATSON

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