Statement of Mr. Geir H. Haarde, Prime Minister of Iceland

The Government and the Central Bank of Iceland have in the past few weeks been preparing various measures in order to strengthen the international liquidity available to the Central Bank and underpin confidence in the financial system and economy of Iceland.

I warmly welcome today's announcement on bilateral swap agreements between the central banks of Denmark, Norway, Sweden and Iceland which is an important step towards this goal. Further measures are under way to enhance the Central Bank's international liquidity.

On this occasion, I wish to emphasize that the Government is committed to pursuing a long-term policy of economic growth and structural reforms in order to increase economic stability.

In order to increase the effectiveness of monetary policy and to remove distortions, the Government will i.a. promptly formulate and make public a credible plan for the restructuring and reform of the Housing Finance Fund system.

To maintain fiscal prudence and to avoid further net-borrowing, the Government's intention is to keep the public debt at its current low level as well as to strengthen the fiscal framework.

The Government will in other policy areas continue to work towards these goals.