VR Urges Government Consultation
26. March 2026VR Urges Government To Initiate Dialogue On The Economy
The Annual General Meeting of VR, held in Reykjavík on 25 March 2026, expressed serious concern about the state of economic affairs. All indications are that the premises of the collective agreements will fail this autumn, and little progress has been made in overcoming persistent inflation. The Annual General Meeting reiterates that inflation is fundamentally a domestically generated problem, rooted in years of mismanagement in housing affairs, profit-seeking by large companies, and tariff increases by the state and municipalities. However, an impending global energy crisis will make matters worse and may have long-term consequences for living standards in Iceland if no action is taken.
The Annual General Meeting of VR points out that VR members took a risk when they accepted collective agreements with low wage increases during a period of inflation in 2024. This was done in the expectation that the authorities would honour their commitments and that companies would restrain price increases. Neither has materialised.
The Annual General Meeting of VR reiterates that the union is well prepared and ready for collective bargaining negotiations this autumn and will not yield in its fight for the interests of its members. However, the Annual General Meeting considers it worthwhile to explore all possible ways to prevent severe labour disputes. For this to happen, employers and the authorities must assume their responsibility, and this willingness must be demonstrated in action in the coming months. It is most important to support those groups that have borne the heaviest burdens during the high-interest environment in recent years, especially families with children, tenants, and wage earners with high housing debt. Further tightening the pressure on these groups through continued high interest rate policies or cuts to services will achieve nothing in the fight against inflation.
The Annual General Meeting of VR calls on the authorities to bring parties together for a solution-oriented dialogue on the way forward in a difficult situation. Large companies that control pricing in the country must reduce their profit margin demands while we navigate the energy crisis and bring inflation under control. The option of implementing price caps should be considered to achieve this goal, particularly with regard to oil; otherwise, increases in oil prices will flow directly and indirectly into the price level, causing increased inflation and, from there, higher housing costs for people in the form of interest and indexation. The authorities must safeguard the interests of those groups that are hit hardest; by doing so, the need for general wage increases in a difficult economic situation could be reduced. The Annual General Meeting believes that municipalities should reverse high tariff increases, especially for heating, electricity, and preschool fees. Real measures in housing affairs are also needed, both in the short and long term.
If we all pull together, success can be achieved for society as a whole. But wage earners will not continue to bear the burden alone. That has been tried and tested.
Source: VR