VZCZCXYZ0001
OO RUEHWEB

DE RUEHRK #0210/01 1640747
ZNR UUUUU ZZH
O 130747Z JUN 06
FM AMEMBASSY REYKJAVIK
TO SECSTATE WASHDC IMMEDIATE 2824

UNCLAS REYKJAVIK 000210 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL MARR IC
SUBJECT:  Iceland Appoints First Female Foreign Minister; 
Incoming PM Geir Haarde Will Continue to Lead Defense Talks 
 
REF:  Reykjavik 196 
 
¶1. (U) Summary:  Outgoing PM Asgrimsson and incoming PM 
Haarde announced 6/10 results of their talks regarding a new 
Icelandic cabinet to take office 6/15: current Minister of 
Industry and Commerce Valgerdur Sverrisdottir, an 
international relations neophyte, will become Foreign 
Minister. Haarde will, however, continue as Iceland's 
highest official conducting defense negotiations with the 
U.S. Both Haarde and Sverrisdottir will meet with the NATO 
Secretary General during the latter's planned 6/15 visit to 
 
SIPDIS 
Iceland.  End summary. 
 
----------------------- 
We have the envelope... 
----------------------- 
¶2. (U) The leaders of Iceland's Independence Party (IP) and 
Progressive Party (PP) coalition government announced June 
10 their decisions regarding a cabinet reshuffle.  Prime 
Minister Halldor Asgrimsson's and Foreign Minister Geir 
Haarde joint statement culminated a week of intense intra- 
governmental lobbying and media and civil service 
speculation about potential fall-out from Asgrimsson's June 
5 resignation announcement (reftel).  On June 15 FM Haarde 
will become the new Prime Minister, while Valgerdur 
Sverrisdottir (PP) will become the Republic's first female 
Minister for Foreign Affairs.  The IP gives up one 
ministerial seat -- the Ministry for the Environment -- to 
the PP, thus reverting to the original coalition agreement 
forged after 2003 parliamentary elections regarding equal 
division of ministries between the two parties. 
 
---------------------- 
And the winners are... 
---------------------- 
¶3. (U) As of June 15 the Icelandic Ministerial line-up will 
be as follows: 
 
Prime Minister--Geir H. Haarde (IP) 
Foreign Minister-- Valgerdur Sverrisdottir (PP) 
Minister of Finance--Arni M. Mathiesen (IP) 
Minister of Justice--Bjorn Bjarnason (IP) 
Minister of Agriculture--Gudni Agustsson (PP) 
Minister of Communications--Sturla Bodvarsson (IP) 
Minister of Fisheries--Einar Kristinn Gudfinnson (IP) 
Minister for the Environment and Nordic Cooperation-Jonina 
Bjartmarz (PP and first-time minister) 
Minister of Industry and Commerce--Jon Sigurdsson (PP and 
first-time minister) 
Minister of Health and Social Security--Siv Fridleifsdottir 
(PP) 
Minister of Social Affairs--Magnus Stefansson (PP and first- 
time minister) 
Minister of Education, Science and Culture--Thorgerdur 
Katrin Gunnarsdottir (IP) 
 
¶4. (SBU) Sverrisdottir has been a member of parliament since 
1987 (and alternate member 1984-1987); and Minister of 
Industry and Commerce since 1999, as well as Minister for 
Nordic Co-operation 2004-2005. As Minister she has been a 
tireless advocate for Iceland's increased industrialization. 
Among government bureaucrats she has established a solid 
reputation for being serious, hardworking, competent, and 
committed to the government's highly successful economic 
liberalization process. 
 
¶5. (U) In the face of vocal opposition from 
environmentalists Sverrisdottir has strongly backed efforts 
by Alcoa and Century Aluminum of the U.S. to establish and 
expand their production facilities in Iceland. Her strong 
advocacy for the aluminum projects has slowly eroded her 
popularity, and in a recent Gallup poll she ranked only 
seventh of the 12 ministers in popularity. Protesters at a 
march organized by environmentalists for municipal election 
day, May 27, carried signs that read, "Drown Valgerdur - Not 
the Highlands."  Sverrisdottir later filed a police 
complaint alleging that the slogans amounted to an 
incitement of violence against herself and her three 
daughters. 
 
¶6.  (SBU) As Minister of Industry and Commerce Sverrisdottir 
dabbled little in foreign affairs - and aside from language 
studies she has no relevant academic background for the job. 
She speaks halting, though passable, English.  Perhaps 
because she lacks confidence as a diplomat, or perhaps as 
part of an inter-party deal that won her the prestigious 
post, Sverrisdottir announced June 11 that she would leave 
defense negotiations to Haarde.  She also disavowed any 
interest in the PP chairmanship. 
 
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NATO SYG Visit 
-------------- 
 
¶7. (SBU) NATO Secretary General Jaap de Hoop Scheffer is 
scheduled to meet June 15 with high-level Icelandic 
officials, to include Sverrisdottir and Haarde.  While 
Sverrisdottir will presumably have her hands full just 
coming to grips with an unfamiliar portfolio, Haarde will 
doubtless use the meeting to press for Alliance support for 
a "robust and visible" defense for Iceland. 
 
¶8. (SBU) Comment:  The choice of Sverrisdottir, while 
unforeseen by pundits (who favored IP stalwarts more 
experienced in foreign affairs), is win-win-win for the 
Progressives: 
 
-- They will control the country's second most powerful 
ministry and the patronage that comes with it (not 
insignificant for a party struggling to hold on to 
membership). 
 
-- By making the argument that continuity is important, they 
leave the loser (as it now appears from a GOI perspective) 
defense portfolio to Haarde and the IP. 
 
-- After an era in which Asgrimsson was seen as promoting 
loyal young men over more qualified women, the PP will now 
get the credit for finally breaking through the socially 
conservative MFA's glass ceiling. 
 
In terms of U.S. interests, this appointment is also a boon, 
as in her performance at Commerce and Industry Sverrisdottir 
has demonstrated sympathy for U.S.-Icelandic business 
interests and vision in advancing them.  End comment. 
 
van Voorst