REYKJAVIK, Sept 2 (Reuters) - Icelandic Prime Minister Johanna Sigurdardottir reshuffled her government on Thursday, saying she aimed to build further on the economy's stabilisation after the small island's meltdown in 2008.
Iceland's top three banks collapsed nearly two years ago in the global credit crunch after years of debt-fuelled growth. The government had to call in the International Monetary Fund and eventually agreed a multi-billion dollar bailout.
Sigurdardottir's Social Democrats and the Left-Greens swept to power in the wake of the meltdown.
"It is to a great extent a financial matter. We need to save wherever we can, but I also think that public administration becomes much more effective this way (merging the ministries)," she told reporters, explaining her reshuffle.
In a statement, the government said the cabinet had been reshuffled and the number of ministers cut to 10 from 12.
The reorganisation means that four ministers, two of whom have no party affiliation, are leaving the cabinet and two new ones are coming in. Non-party political Business Affairs Minister Gylfi Magnusson will be replaced by Arni Arnason, a Social Democrat.
The statement said the coalition had managed to guide the country back to economic sustainability and set out goals for the reshuffled cabinet for the next 20 months.
These included completing the third and fourth reviews of the IMF loan programme and completing the whole programme in the middle of next year.
The document said the government would also review whether new loans were needed and take the next steps in ending capital controls, which were introduced to stop foreign funds fleeing the island and to prevent a crash in the crown currency.
The government made no mention of the Icesave dispute with Britain and the Netherlands.
The British and Dutch want Reykjavik to return $5 billion of money paid to depositors whose funds were frozen in so-called Icesave accounts operated by Landsbanki, which also collapsed.
(Reporting by Birna Bjornsdottir; writing by Patrick Lannin; Editing by Elizabeth Fullerton)