It used to be said that the one thing an ambassador could always count on while serving in a foreign capital was good housing. For Iceland’s envoys in Washington, New York, London, Ottawa and Tokyo that will no longer apply — and the sooner the better, as far as the government in Reykjavik is concerned. As part of its efforts to repair Iceland’s devastated economy, the government has put the “For Sale” sign on all five embassy residences, in the hopes of raising at least $20 million.
The plan to sell the 10-bedroom mansion that serves as the Icelandic residence in Washington, with a price tag of $5.3 million, was first reported by the Wall Street Journal in March. This week, an embassy spokesman, Finnur Thor Birgisson, said there were still no takers for any of the residences Iceland has put on the market. “The present economic situation has required Iceland to implement a pretty strict austerity program, and our Foreign Service has not been excluded from implementing these budget cuts,” Birgisson said.
In New York, Iceland’s ambassador to the United Nations occupies a Park Avenue apartment. But the prime property is the Icelandic residence in London, a neo-Georgian house priced at $14.4 million. As the residences are sold — hopefully by 2010 — Iceland plans to move its homeless ambassadors into more modest accommodations.
The country’s banking system collapsed last year, an early casualty of the global financial crisis. Iceland’s economy went next, and then the government itself was forced to resign. Besides divesting itself of high-value real estate, Iceland will this year close seven embassies and missions, and reduce diplomatic staff wherever possible. The Washington embassy is already one diplomat smaller as of this month, Birgisson said.
Iceland’s economic woes are unique as to scope, but other European foreign ministries are also feeling the pinch. In Washington last week, diplomats from Sweden — which as of July 1 took over the rotating EU president — told colleagues that, because of budgetary constraints, there were no plans to add diplomatic staff to Swedish embassies to cope with the greatly increased workload the six-month presidency brings with it.