During a meeting with the Icelandic Independence party this morning, PM Geir H. Haarde didn’t mince words about the British authorities. According to him, the British authorities had brought Iceland’s largest bank to its knees with their abuse of power this last week and that Iceland must look seriously into the possibility of litigation, MBL reported.
Haarde said that a government should naturally defend the rights of its subjects, but the statements of the British had been quite unwarranted.
“I won’t try to hide my surprise and disappointment when it became clear that the British government enforced the laws on defence against terrorism against Icelandic companies in the UK. Laws that were indeed very controversial when they were passed because of the inherent possibility of being abused in alternative situations, not involving terrorism at all. Perhaps we have now witnessed how that controversy was warranted.”
“These measures, along with the statements of the British PM, with whom I have by the way had very friendly relations, coupled with his statements about the defaulting and possible national bankruptcy of Iceland, can in fact be interpreted as an assault against the interests of the Icelandic nation, bearing in mind the difference in size and power between these two nations,” said Haarde.
He added that despite the fact that the British government had acted on the assumption of right against the Icelandic government over collateral and settlement of some bank accounts, the initiative of the British ministers had been completely out of proportion with the issues.
“We neither can, nor will (Icelanders), accept being cast as terrorists by the British government. When I asked the British Minister of Finance, in our conversation if they were serious about the title they were giving us, he denied it. But acting in this fashion against a smaller nation of friends in times of trouble is neither proper nor ethical,” said Haarde.
He continued that following clear and unambiguous Icelandic complaints, the British authorities had backed somewhat away from their position and that there were efforts towards normalising relations between the countries.
“However the fact remains that the British authorities may have caused immense damage with their brutish behaviour. Among other things, they may have brought down Iceland’s largest company with their abuse of power this week. We must look in all seriousness into the possibility of litigation because of these deeds,” said PM Haarde.
On Oct 24, 2008, bc123a wrote:
>…the more I read the facts (including the interview with David Oddson and the transcript of the
>infamous conversation), the more I am convinced that you cannot blame anyone else than you.
>It does not matter what exactly Darling (mis)understood during that conversation. The iceland’s
>finance minister was clear in that conversation (read the whole thing, not just the excerpts!):
>iceland was totally unable to guarantee deposits of iceland’s bank (not only the deposits of one
>bank, landsbanki, which was then in the focus).
No, it matters a *great* deal what Darling was told in that conversation because it is as far as we know the reason used to justify freezing the Landsbanki funds (under Part 2, Article 4 of the Anti-terrorism, Crime and Security Act 2001) and then as the justification to also force Kaupthing Singer & Friedlander into administration* thus forcing Kaupthing, a solvent bank, into technical default, and then so almost guaranteed bankruptcy. (David Oddsson’s interview has not actually been cited by Darling or Brown as the basis, but no doubt they will stretch to that soon enough as the pressure mounts on them.)
If Darling did not have a sound basis for his categorical assertion (first made on BBC radio and then picked up by media worldwide), which he clearly *didn’t*, then he acted in extreme bad faith, as did Brown who must also have been fully briefed on the reality. These are meant to be responsible leaders of state, not ‘the man on the street’. Their positions of office mean their actions are held to a higher standard.
*under Section 6 of the Banking (Special Provisions) Act 2008 AKA The Northern Rock Act.
Also has it not perhaps occurred to you that as an operating and solvent bank, Kaupthing and its fully UK-based and regulated subsidiary Kaupthing Singer & Friedlander might have been able to help the situation that savers and other creditors of Landsbanki now find themselves in if it were still operating?
By perhaps buying Landsbanki (as was the intent of Kaupthing management as reported on Oct 5th) and thus ensuring that UK and Dutch savers, etc. would get their money more quickly, other than as now having to wait up to 3 months and making applications for compensation being paid, etc. (although who knows what will happen with the Landsbanki assets currently in the hands of the U.K. Treasury – perhaps they will be ‘utilized’ for this purpose as that is good politics for Brown and Darling and to hell with the UK charities and local authorities, etc, etc.).
Landsbanki had assets and still does, but now they are to be liquidated at fire sale prices, and no doubt these are now worth far less than if it had been acquired by Kaupthing.
Landsbanki acquired by Kaupthing would also have meant that the UK charities and local authorities plus other non-UK creditors would not be losing out (as appears to be the case).
>Banks, having liabilities exceeding 100 bn EUR. This is insane for an country of 300.000 people,
>my god! The foreign depositors could NEVER be repaid, since the numbers per icelander were
>simply staggering (EUR 20.000 per icelander or more).
The banks had good assets and I don’t think anyone knowledgeable has disputed that they were well run. However, as is the case with the majority of banks (except for example some Islamic banks), for all, the amount of leverage in their debt to equity ratios is simply a matter of degree.
Modern banking is based on fractional reserve operation, and therefore it is the willingness to be lent money, as well as perception of stability that matter most.
By way of example Switzerland’s banks are far more highly leveraged than Iceland’s, and so are the UK’s. Switzerland’s banks are in worse shape than many (UBS for example has huge exposure to toxic subprime securities), and they have their own currency just as Iceland. The Swiss Franc while well managed is a very small currency. What the Swiss do not have is a so called ally government telling lies and accusing them of being bankrupt as has happened with Darling and Brown.
As the credit crunch has hit harder and harder what mattered in the final analysis was to have a powerful lender of last resort. The Icelandic banks and government did seek assistance* but were rebuffed. And then of course at a critical time came the actions of Darling and Brown. Do not underestimate the damage that their briefing of the world did, let alone their asset freeze of Landsbanki and forced shutdown of Kaupthing Singer and Friedlander.
*the banks were entitled to liquidity assistance from the governments of the countries of their subsidiaries i.e. Luxembourg (European Central Bank, Euros), or London (Bank of England, Pounds) via such mechanisms as the discount window and open market operations of the respective central banks.
>So I know you did not defraud the
>depositors intentionally, but this does not help people who lost their life savings, proceeds from
>the house sales, and similar.
If you are referring to the citizens of the UK and the Netherlands with deposits in Landsbanki, then what you actually mean is that people who are going to have to wait probably at most a few months to get their money back. They have *not* lost anything in fact, other than potentially interest on the money.
The deposits of ‘ordinary’ British depositors are guaranteed by the Icelandic government up to EUR 20,887 (£16,300) as was always made clear on the Landsbanki account documents, website, and elsewhere, and the UK government for funds above that (although not true yet of Kaupthing Singer & Friedlander Isle of Man Ltd and Landsbanki Guernsey).
The people who have “lost their life savings, proceeds from the house sales, and similar”, as you put it, are ordinary *Icelanders*.
Ordinary Icelandic people are indeed covered by the deposit insurance and additional guarantees for money they had in accounts at the banks (as the UK has given for their own citizens). But *not* those Icelanders who have their lifetime savings invested in bonds and shares of the banks. Those are *not* covered by deposit insurance. A huge number had bought longer term bonds or shares in the banks that are not covered, some dating back from the late 1980s and early 1990s.
It appears Icelanders will lose all of that.
You don’t hear them complaining about it too much, but many people in Iceland are losing their life savings because of this, the unfair collapse of the banks.
>Please, do not insult other people with the excuses that you did not anything with it.
>You profited from it.
Really, other than for a few years of a strong Icelandic Krona making some goods relatively affordable for the first time (not true today with a 40% or more depreciation), how exactly did your average, hard working Icelander profit?
Those who invested in bank shares or longer term bank bonds have now been wiped out.
Those who took out loans in foreign currency (most people) are now seeing loan payments doubled or tripled.
So, again, how exactly has your average, hard working Icelander profited?
>It was unsustainable, and you cannot pay back the depositors, which financed the
>lifestyle of each and every icelander with (now gone) deposits.
The UK deposits are not *gone*, they are either frozen in accounts in London, or in the form of monies loaned out to people that are to be paid. Of course all of these assets are not all liquid right now, but that’s the way banks work.
In sum, you are way, way out of line making statements like you have unless you know something very specific about the Icelandic situation of the last few years that the Icelanders now facing huge price hikes on even the most basic goods, crippling loan payments, and the loss of shares in banks and bonds, themselves don’t.
Short term, Icelanders are having it harder than UK and Dutch depositors (the Netherlands has anyway come to terms far more quickly and reasonably regarding IceSave) even though those depositors are currently *temporarily* without their money.
Mid-term for many ordinary Icelanders life will be far far tougher because of what has happened to the banks than for UK depositors who can just walk away with their money once it is refunded to them. Many Icelanders as I said have lost it all and while they have their much commented on goods, TVs, cars and so forth, have crippling loans making those items worth less than the loans they have.
Of course Icelanders will bounce back but short and mid-term things are going to be very tough.
On Oct 24, 2008, Trevor wrote:
>Iceland Review has kindly printed the transcript between Árni Mathiesen
>and Move-over-Darling which led to his statement that the Icelandic
>Government (”believe it or not”) had no intention of meeting it’s
>international obligations.
>
>He was wrong, but only slightly. “No intention” was wrong, as there was
>intention but only after Icelandic depositors were taken care of, and,
>btw, “we have no money and we’ve been trying to tell you for six months”.
No, he was not “wrong”. Darling *lied*. As is the case, as the truth comes out, many who believed Darling and Brown are suffering from cognitive dissonance*. I think you are one of those Trevor, and if so who can blame you. They are after all, in the top spots at the head of the UK government, and as such we should all expect a high standard of probity from them.
*On cognitive dissonance: “when someone is called upon to learn something which contradicts what they already think they know — particularly if they are committed to that prior knowledge — they are likely to resist the new learning.”
Darling’s sound bite on the BBC radio that he then continued to repeat in other interviews including on BBC GMTV, then shot around the world far and round by a media eager for news was *not* a fair good faith summary of the position of the Icelandic government, either in general, or based on the conversation between Darling and Mathiesen.
I also wonder if Darling actually read the letter sent by the Icelandic Government on the 6th October.
Mathiesen: “…we have set out a new legislation where we are prioritizing the deposits.”
[This refers to change to the Icelandic “Act on Deposit Guarantees and Investor-Compensation Scheme, No. 98/1999? which bumped bank depositors right to *the top* of the list of creditors in the event of bankruptcy of the banks, as signed into law on the day of the conversation (7th) but that was no doubt explained in the letter of 6th October.]
Mathiesen: “…Yes, we guarantee the deposits in the banks and branches here in Iceland.
Darling: But not the branches outside Iceland?
Mathiesen: No, not outside of what was already in the letter that we sent.”
[i.e. only to the the minimum deposit guarantee for savers of EUR 20,887 (£16,300) for each account holder, foreign or not, based on EU directive 94/19/EC.]
….
Mathiesen: “but the point is also, Chancellor, that we have for months been trying to talk to everybody around us and trying to tell them that we were in trouble and ask them for support and we have actually gotten very little support.”
…
Darling: “Well, you know, I do understand your position. You have to understand that the reputation of your country is going to be terrible.”
Mathiesen: “Yes, we do understand that. We will try our utmost to avoid that. We need to secure the domestic situation, before I can give you any guarantees for anything else.”
…
Darling: “…We would have to explain to people here what has happened. It will, of course, no doubt, have repercussions for others. It really is a very, very difficult situation where people thought they were covered and then they discover the insurance fund has got no money in it.”
Mathiesen: “Yes, as we said in the letter …”
[then interrupted again by Darling, a common trait in the impatient way Darling communicates.]
What is clear here is that the Icelandic government guarantees to back the Depositors’ and Investors’ Guarantee Fund up with taxpayer’s money even if that fund has insufficient monies in it, but only up to their obligations of EUR 20,887 (£16,300) for each account holder.
And clearly what Darling *wants* to hear is that they will guarantee *all* deposits for everyone in the UK too. But of course, no responsible member of government is going to promise that given that Iceland has just shy of 180,000 taxpayers in total**. But certainly it was clear that the Icelandic government was going to live up to its promises of EUR 20,887 (£16,300).
**As David Oddsson stated in his Kastljos interview in the evening of 7th October:
“…When the debts have reached a stage where the banks need EUR 50 billion to EUR 55 billion in the next three to four years and they can’t get the money because interbank wholesale lending markets are not functioning then if we committed to this we would be placing our children and grandchildren into so much debt that it would be slavery.”
I urge everyone who has not done so to read the complete transcript of the conversation at http://www.icelandreview.com/icelandreview/daily_news/?cat_id=28304&ew_0_a_id=314205 , and also to seek out the transcript of the David Oddsson Kastljos interview in my comments here:
https://www.icenews.is/index.php/2008/10/16/unbowed-icelandic-pm-sends-a-strong-message-to-uk/
try and keep your mind open and seek the facts yourself before parroting off the big lies put out by the Brown-Darling axis of disinformation.
The transcript shows that Darling lied. And showed extreme bad faith.
While you are about it, look up the Scottish Glenrothes by-election of 2008, the “arc of prosperity”, (and newly coined “arc of insolvency”), as well as what exactly Gordon Brown has to lose if his party gets trounced in that by-election by the Scottish Nationalist Party. I think then you will understand why Gordon Brown did what he did based on Darling’s lie.
To icelanders:
sorry guys. I cannot help to be sympathetic with your plight, because there are really hard times ahead for you. But, the more I read the facts (including the interview with David Oddson and the transcript of the infamous conversation), the more I am convinced that you cannot blame anyone else than you.
It does not matter what exactly Darling (mis)understood during that conversation. The iceland’s finance minister was clear in that conversation (read the whole thing, not just the excerpts!): iceland was totally unable to guarantee deposits of iceland’s bank (not only the deposits of one bank, landsbanki, which was then in the focus). How this happened? Well, first, you had unbearable, almost idiotic concentratration of financial sector. Banks, having liabilities exceeding 100 bn EUR. This is insane for an country of 300.000 people, my god! The foreign depositors could NEVER be repaid, since the numbers per icelander were simply staggering (EUR 20.000 per icelander or more). So I know you did not defraud the depositors intentionally, but this does not help people who lost their life savings, proceeds from the house sales, and similar. And yes, YOU DID PROFIT from that insane banking scheme. You did profit with all the jobs the financial sector and its offshots, you did profit from the acqusition spree, performed by your tycoons worldwide. You did profit, since the industry (fishing and aluminium) on your island simply cannot provide the luxury of being one of the most rich nations on earth, it cannot provide the means for the most extravagant cars, most expensive dining and drinks and the designer gear in reykjavik shop for nouveau riches. Please, do not insult other people with the excuses that you did not anything with it. You profited from it. It was unsustainable, and you cannot pay back the depositors, which financed the lifestyle of each and every icelander with (now gone) deposits. If you will be ever able to pay back the money, it will be with significant fall in quality of live, basically, to the levels where iceland was before this banking craze started, and most probably even below that in the near term.
Sam, I understood that it would be done in stages. I’m not sure of the numbers but it sounded like they would start by giving their money back to everybody up to 5,000 GBP, then, when they can, up tp 10,000 GBP, and so on. This sounds fair because it means that all the people who are not rich will get their money back in full first. People who had 1,000,000 in Icesave will have to wait, but then they probably have a bit on the side as well, so we shouldn’t worry too much about them.
Have you all read the news today that the talks between UK and Icelandic governments’ representatives have broken up with no results, regarding Icesave depositors? It is really shamefull and frustrating. People like myself who have trusted these Icelandic banks with our money, they are not even able to honour their commitments for UK and other national savers, except their own Icelandic people, frankly it is pathetic and dishonourable. We are hard working ordinary people in the UK having our savings in Icesave and we must not suffer for Iceland’s bank malmangagement and their government’s broken promise to savers (other than Icelanders). I have one question to Icelandic government: I have a family with four children and this is my income to survive day-to-day living, how are you going to help me and speed-up your PROMISED compensation? This money is not for luxury for most of us it is to live by. We are suffering and very angry for all these political affairs. Stop blaming eachother, I and other depositors do not want to be in the middle of this blaming game and show us our money quickly PLEASE PLEASE
Iceland Review has kindly printed the transcript between Árni Mathiesen and Move-over-Darling which led to his statement that the Icelandic Government (“believe it or not”) had no intention of meeting it’s international obligations.
He was wrong, but only slightly. “No intention” was wrong, as there was intention but only after Icelandic depositors were taken care of, and, btw, “we have no money and we’ve been trying to tell you for six months”.
You can’t meet obligations with intentions, no matter how genuine.
I have tried to sympathise with Icelanders in their plight, but it is becomming impossible. A paltry 500 turned up to demonstrate to demand the resignation of Oddsson last Saturday, meanwhile 40,000 sign a petition saying “we are not terrorists” (complete with photos of 2 year old kids with “Icelandic Terrorist” photoshopped onto them). What an utter waste of bandwidth. Not a soul on earth has called them terrorists. It is an excercise in self delusion par exellence. Said petition also has an excerpt from the transcript as if to prove their point, without realising it shoots their fox dead.
What is this story about Britain sending a plane-carrying warship into Icelandic waters? If their really is such a plan I hope it’s going to be cancelled. Has everyone lost their minds?
On Oct 15, 2008, John wrote:
>Your banks and Government have destroyed your economy
>and worldwide reputation.
With huge help from Brown and Darling.
>…One benefit for the UK I suppose is that the
>Scots can no longer claim that they
>can go it alone by citing Iceland as a leading light
>of independence and economic strength.
Ding. Well, that’s what Brown’s actions in pushing Iceland over the cliff, were for weren’t they. He’s not even trying to hide it.
The Scots have just had their two biggest banks nationalized… by Brown. And the formerly prosperous member of the SNP’s “arc of prosperity”, Iceland, has been helped by Brown to become, well… a lot less prosperous.
Yet, I do not think Scots will fall for this. Labour/Scottish Labour are a spent force.
Brown is desperate that his party not lose the Glenrothes by-election in November (next door to his own constituency in Fife). Clearly he will do almost anything to achieve that including pushing Iceland to the wall. Q.E.D.
Oct 23, 2008, Peter MacIntyre wrote:
>A large number of foreign depositors held savings
>with failed Icelandic banks; in fact British savers were owed far more than Icelandic savers.
True, in that at the level of deposits Brits had slightly more money deposited in banks’ accounts, but not by much more.
But… that does not include all Icelanders who have their lifetime savings invested in bonds and shares of the banks. Those are *not* covered by deposit insurance. It appears Icelanders will lose all of that. They trusted the banks, right to the end, and are going to lose it all.
In contrast British depositors are guaranteed by the Icelandic government and the UK government (although not true yet of Kaupthing Singer & Friedlander Isle of Man Ltd and Landsbanki Guernsey).
As British savers invested en-mass solely in deposits, not bonds and the like they will get all their money back. Not true of Icelanders who are only covered for bank deposits. A huge number had bought bonds or shares in the banks that are not covered.
You don’t hear them complaining about it too much, but many people in Iceland are losing their life savings because of this, the unfair collapse of the banks.
>The Icelandic government response was to announce
>that Icelandic depositors (i.e. voters) would have
>their deposit guarantees honoured whereas
>foreigners should look elsewhere for redress.
No, completely false. If you really care about the truth, take a look at my posts and those other others here about this:
https://www.icenews.is/index.php/2008/10/16/unbowed-icelandic-pm-sends-a-strong-message-to-uk/
>The government then proceeded to pull overseas funds
>back to Reykjavik.
False. What they did do is ask the banks to sell their foreign assets (i.e. brokerages, etc.) in order that the banks would pay off their own debts (the banks that is) in the UK and elsewhere.
Landsbanki was *not* pulling funds back to Iceland, the exact opposite in fact.
And Kaupthing was pulling huge funds back to the UK subsidiary in order to cover its debts almost to the hour that Kaupthing Singer & Friedlander was seized for ‘insolvency’. Again, I repeat, they were sending money *into* the UK.
Please, reconsider what you think you know about this, and seek the facts before you repeat the big lies put out by the Brown-Darling axis of disinformation.
Criminals not Terrorists.
The Icelandic Government’s claim that it has been unfairly labelled as a terrorist organisation is as dishonest as its financial activities. A large number of foreign depositors held savings with failed Icelandic banks; in fact British savers were owed far more than Icelandic savers. The Icelandic government response was to announce that Icelandic depositors (i.e. voters) would have their deposit guarantees honoured whereas foreigners should look elsewhere for redress. The government then proceeded to pull overseas funds back to Reykjavik. Morally the paying of a privileged few at the expense of the unlucky foreigners is questionable; legally it is the criminal act of fraudulent preference. The UK treasury, identifying that the Icelandic government was engaged in criminal activity, evoked powers available under the Anti-terrorism, Crime and Security Act 2001 (NB the word “Crime” halfway through this title).
It would serve the Icelandic Government better if it dropped the poor victim routine with “Icelanders are hurt that the British government acted under the Anti-terrorism Act” and acted in a more honest manner with something like “We are very sorry for savers, Icelandic and foreign, who have lost money amd are doing all we can to help them” but I guess politicians don’t work like that!
This guy is a complet joke ! He is not only a trader to his own country but now he wants to dig into other people pockets ! What a obvious conspiracy this is and really an emberasing thing for the great folks of England ! I love England and I always will but the CRAZY pm should be prosecuted and definately put out of office … Bring Tony Blair back … He would never be such an idiot and a lunatik !!!
>Stick to your guns, Iceland! The British Govt is trying to make you the scapegoats for its own dodgy dealings.
Rubbish.
Icelands financial problems were fatal long before Britain acted. In the days before the PM said that all the banks credit lines had been stopped. Without new credit they were with days of closing. Britain used the same law to seize Bradford and Bingley’s accounts a few days before.
The reasons for the UK Govt’s hard line sit a little closer to home, I’m afraid.
Vast amounts of taxpayers’ money and public funds were sitting in high interest accounts, making profits for greedy public officials.
The money should never have been there in the first place.
GB knows that if he doesn’t get that money back, there will be an uproar.
Stick to your guns, Iceland! The British Govt is trying to make you the scapegoats for its own dodgy dealings.
@ John
with all you wrote you forgot one thing
FISH 80% of exports
John: people need to be calmed and reasured these days, and as long as Iceland plans to meet it’s financial obligations things are ok.
We have some very very bad news comming in the future, believe me I work in a large Bank assessing the financial news and giving recommendations. I am young so my experience doesn’t go that far back, but I talk as much as I can with the old wise owls at the office. And they all concour they’ve never seen anything like this, what comes closest is when the soviet union collapsed in 1991.
Hey Great Dane
Apologies my friend no offense intended
I guess you are Danish a fine and proud nation and close to our hearts
Take care ol fellow
Oh no a dear John letter :)
Well how would you declare a sovereign nation bankrupt? you simply can’t!!! sovereign nations decide fully what they want and do not want to do.
Anytime they please a sovereign nation can declare “We do not intend to full-fill our financial obligations” and that is it. Nothing anyone can do about it. Should the UN send “peacekeepers” to extract the money from a sovereign country? The day a resolution like that will not be veto’ed in the security council, is the day hell freezes over.
And John, for the record, I do not live on Iceland, so quit the “YOU” stuff allright!!
**Dirtbag**
Dear Great Dane
Can you explain to me why it is not Bankrupt?
I will try my best but here goes…
What does it mean when a country — as opposed to a person or an institution — goes bankrupt?
WHAT IS IT?
Bankruptcy is when an entity is legally declared unable to pay creditors. The phrase “national bankruptcy” itself is not a common economic term with any agreed definition. In essence, it could be read to mean a country cannot pay its debts or raise foreign currency to pay for imports. In economic jargon, it could also be known as a “balance of payments crisis”. The balance of payments measures all the payments that flow in and out of a country.
WHAT CAN A COUNTRY DO?
If a country no longer has enough foreign currency to pay for imports, it typically must borrow funds from the International Monetary Fund (IMF) or other countries.
Without that, it would soon not be able to import necessary goods and services — a particularly troublesome prospect for a country such as Iceland, which relies heavily on imports.
So what can you do ? you can do a Mugabe..
You can print as much cash as you want but that does not
answer the problem witness the poor people of Zimbabwe
Honestly …What does Iceland actually produce?
I know you have plenty of fish but is that enough to sustain your economy?
How does one measure the true value of your currency?
THE TRUTH IS SCARY:YOU ARE BEGGING COUNTRIES FOR FOREIGN EXCHANGE TO BALE YOU OUT AND TO BE RESCUED FROM A CATASTROPHE
Iceland’s banking system is £35billion in debt – the equivalent of an incredible £116,000 for every man, woman and child on the island,
With a population of just over 300,000 a miniscule economy and banks deeply involved in global markets before the meltdown, Iceland is on the brink of national bankruptcy..
The debts of the Icelandic banking system are too big for the government to repay. There is no way that the Icelandic population can assume responsibility for the private debt.
Some more facts ..Icelandic banks owe x8 the GDP of iceland!
GDP (purchasing power parity): $12.19 billion (2007 est.)
GDP (official exchange rate): $20 billion (2007 est.)
GDP – real growth rate: 3.8% (2007 est.)
GDP – per capita (PPP): $40,400 (2007 est.)
GDP – composition by sector:
agriculture: 5.2%
industry: 25.7%
services: 69.1% (2007 est.)
Where is Iceland’s real wealth ? Services?
How self sufficient are you ?
You can’t grow much so you have to import most of your food other than fish…
I AM SORRY BUT ONE CAN ONLY CONCLUDE THAT YOU DON’T HAVE ANY MONEYTO PAY YOUR DEBTS OR YOUR COUNTRY’S ANUAL BUDGET
I WOULD SAY THAT YOU ARE TECHNICALLY… BANKRUPT!
Fish
Oh and by the way John, would you please explain to me how a country can go Bankrupt ?
A country a can fail to meet it’s financial obligations but never go Bankrupt.
It’s not that bad it happens now and then, Argentina and Thailand have “failed to meet it’s financial obligations”, and they are back on track.
Luckily for savers Iceland have decided to meet it’s financial obligations, if it didn’t savers would really be in deep sh..
Scotland is about the size of Denmark or Norway, in population, and atleast 15 times larger than Iceland. I think Scotland could do well.
Well said JC
Punching above their own weight comes to mind.
Iceland is Bankrupt and should be punished for their
blatant exploitation and irresponsibility.
Your banks and Government have destroyed your economy
and worldwide reputation. Still I guess you
have plenty of fish to eat. We should all learn from this
debacle .One benefit for the UK I suppose is that the Scots can no longer claim that they
can go it alone by citing Iceland as a leading light of independence
and economic strength.
Maybe Icelanders should start looking at their own pathetic government before blaming the UK. I shall be making an effort to avoid all Icelandic goods and services as best I can.
@Kam
> “the moment you deposited in those high-yield
> accounts everybody was warning you about, you
> more or less elected not to have a serious voice
> in finance or economics”
>
> Are you serious? Icesave was guaranteed as per
> international agreements. There was no reason to
> assume that they would lock customer accounts.
> If Haarde’s response had been a little bit more
> than side stepping and silence this thing would
> not have become such a problem.
I am serious. There were voices of concern – as there sometimes are, when offers are too good to be true. No matter if it’s Barclays or Lokalibanki, an investor or a depositor is unfortunately to be caveat emptor.
> “That precedent makes good old credit ratings
> obsolete”
>
> You seem to think Iceland still has a good
> credit. It currently stands at BBB in Standard
> and Poors I believe. From Wikipedia “Anything
> lower than a BBB rating is considered a
> speculative or junk bond”. So figure it out for
> yourself.
Glad you took the trouble to read somewhat into this. But compare that to what you said above, and check the credit standings of the Icelandic banks too while you’re at it. Be sure to check the historical ones as well. In short, credit standing were rather poor, and for any guarantees, there’s a limit too. There always was. You’d better check those facts when investing on a high-yield savings account, no matter if it was from U.K., U.S., Iceland, Sweden or Nigeria.
Getting more fundamental, take a few courses I suggest, to understand HOW the rating agencies rate the entities they rate. In short, prior to Lehman, the rating agencies did not consider itat all possible for a host nation to let a major bank collapse. And before Kaupthing, they did not expect nations to take over foreign banks local holdings using terror laws, either.
But Kam, hope you can digest all that. CBI did take poor steps all along, Icelandic banks were for long mistrusted entities but still rather healthy. Not all listened to the facts. The turns credit crisis had took their effect, but it was ultimately Gordon who took down Kaupthing and made sure Kaupthing went under on a bargain, leaving less for the depositors, and effectively destroying what was left of Icelandic banks.
I’d recommend books, but I suspect you’re more into comics.
@KAM Your A person I hope I never get to meet.
Lots of interesting stuff going on here, A few things to point out thou.
1) up untill last Monday the Nation of Iceland had no large Foreign debt like so many countries n the EU do have and UK has LOADS, (If my facts are correct)
2) Part of the collappse of ICESAVE was due to (or the First Domino) was in fact a British travel holiday company that went bankrupt, Owned by a company with close connections to ICESAVE.
3) If I go to a bookmakers and place a bet, I cant go and change the bet once the race is over. This to me is kind of like this scenario. The race is over, The bank is shut.
4) Im English and I think Iceland should tell England to get stuffed after Killing Kaupthink !
5) Iceland has Loads of Energy Water Fish n Lamb, with a small Population, they will survive, much better than the the UK when the real Financial times come up around the world.
Alfram Island !
The simple facts of the matter: Iceland can’t pay, won’t pay out on all its debts.
Therefore, you gotta take what you can, when you can.
Which is precisely what HMG did.
Iceland is a bankrupt country. It’s a shame, but it’s a fact.
oh and by the way, Kam, admit it, this is kinda fun……a forum like this…
No you get my point excactly. No law was broken! that is the whole problem!
look kam, i do not care about the economy, iceland or these banks. My problem is that our government used laws that first of all never should have been passed through the house of commence or the house of lords and second of all should be applied very, very precisely!
i just feel that my government has not done that! they have used a hatched instead of the scalpel!
what is more worrying, is that the British electorate has rewarded them for this “legal” action with a 10% boost in the polls.
funny that you in your example do not come up with a third, innocent party! because that is what i have been saying the whole time. these laws have been used against a group of people because of their association with the guilty!
so in your example, yes, grab the cars. but i think it is wrong that my government would now grab all rolls royces!
i am sorry to tell you, but you and i know live in a country where you can be guilty by association, the government can take hold of what is yours and the public will applaud the officials for doinf so. And to think that over the last 8 years we in Britain have been getting worked up and making jokes about George Bush and his anti-terror law “the patriot-act”. yet here we are….
@icecold,
So let me get this straight. If someone were to use your money to buy two rolls royces and put them in your garage and you then got wind of the fact that they had *nothing* to pay you with, you would just let them carry on like normal? You wouldn’t lock it up and seize it? Because that’s just about the equivalent of what you are suggesting the UK would do with all the assets of depositors.
“Kaupthing would have been able to survive”
Absolutely not the same thing as not having any back up funds as required by international agreement. No equivalency here whatsoever. One pertains to being able to operate the business, the other pertains to whether you are able to ensure you can pay what you owe with a dedicated back up fund. Breaking the latter was in itself to have broken the agreement in the first place.
I won’t bother arguing the rights and wrongs of using the terror law with you. As far as i can see you can’t get over the fact that it was legal and legitimate. No laws were broken in the process. If you want to get riled up about that fine.
I’m outta here. This is getting boring.
@ kam,
“So what? Just because its dangerous doesn’t mean it’s not applicable” ?
That is excactly what i mean! These are dangerous laws that were not even used by our government when British lives were at stake. But now that it comes down to “a bit” of money all of a sudden we, england, take a step that even George W. Bush would not dare to take, neither any other EUROPEAN affected country did! Only we, the UK, tokk this step unilaterally, without speaking to any european partners, who too have icelandic banks on their shores.
“Wrong. The affiliation was that both were backed by absolutely *nothing*”
Not true! Even economist from the London School Economics stated as late as friday that Kaupthing would have been able to survive, if Gordon and co. would not have taken these steps. That’s our top economic elite and I trust them a lot more than any politician as they are impartial!
“Haarde stated that he had no idea if Kaupthing was safe from collapse”
Indeed he did not know, just like Gordon and Alistair do not know if i’ll be paying my rent next month. why? because Haarde is not on the board of the bank and Gordy does not know the state of my bank account! So next week they can tow away your car, because, when asked, your neighbour could not state if you would be able to make your payment?
You are silly and naive to think that the Brown cabinet handled in the nations best interest! Gordon Brown did himself a favor with this unilateral decision and then….. called on the world for a global solution!
hypocrisy and you’re biting!
http://reviewalizer.com/
@Joakim,
I refer you to BBC interviews with Mr Haarde. Mr Haarde only ever stated that Icelandic depositors were safe, not foreign depositors. There are about 3 different interviews on the BBC website in which he categorically *refuses* to answer if foreign deposits are safe. Draw your own conlclusions about who really said what.
@icecold,
Maybe it slipped your attention but Iceland had *no* back up fund. Kaupthing too was in trouble (yes, even before it was seized). So either the government let it go the same way as Icesave which would entail even more depositor risk or they would seize it as collateral.
“it is a blanket law that is open to a very wide interpretation, and therefor a very dangerous one”
So what? Just because its dangerous doesn’t mean it’s not applicable.
“and the affiliation between Icesave (landsbanki) and kaupthink is that they are both ICELANDIC”
Wrong. The affiliation was that both were backed by absolutely *nothing*, no back up fund and no money from the Icelandic government (as though had none). Not only that, Haarde stated that he had no idea if Kaupthing was safe from collapse (again see BBC interview with him). The fact that there was no back up fund/depositor safe guard in itself was a breach of the “passport” agreement.
So you can scream and shout all you like about how morally bankrupt it was to use the law but the fact remains, it was a perfectly legitimate use of the law as passed by parliament.
@Joakim
You can hear PM Haarde’s comments on the BBC Website. He says that he will not protect the deposits of British or Dutch depositors. Take a look for yourself.
@Kam,
It’s irrelevant what Alistar Darling stated, as it’s word against word. Icelandic media and politicians said the opposite, and Mr Haarde stated again after the threats that there was no intention from the icelandic side to ignore its responsibilities. But this had no effect on the british government. I’d like to think it was a misunderstanding from the beginning, as if this was deliberate it would mean the british government is not only stupid, but a true enemy of Iceland aswell. Whatever the reason was, as britain instantly retaliated for something that was all in their head, it was too late to correct their mistake as the icelandic economy had already been crushed. One can’t help to suspect they took the opportunity to get back at Iceland for the cod wars.
@ kam
i am perfectly well aware of which law was used thank, thank you very much. This law states that the government can do anything to protect British society and the well-being of its people. it is a blanket law that is open to a very wide interpretation, and therefor a very dangerous one. And you prove my point when you state;
“in which case they would seize the assets of the individual or organisation they are affiliated with”
Excactly!
and the affiliation between Icesave (landsbanki) and kaupthink is that they are both ICELANDIC! That is the only thing they share! they share a nationality and therefor both of them must be guilty? you must agree with me that this is surely an abuse of this law?!
How would you like to be arrested for sex with a minor next time you travel to Thailand? Of course you are innocent, but you hold the same passport as Gary Glitter, do you not?
No, i am not “simply being disingenuous”, i am just very angry with my PM and his gangster cabinet for abusing their power. And i am even more angry with my country man that Gordons ratings in the polls have gone up by 10 points for invoking a law that never should have seen daylight in the first place.
Iceland may be bankrupt financially, but the UK is bankrupt morally!
@Anna
No, Iceland DOESN’T owe the dutch government the money between 20k and 100k. The agreement was clear and simple: Iceland takes care of the first 20k of dutch savers, the dutch national bank (DNB) takes care of the rest. Originally this was 90% of the money between 20k and 40k, now it’s all between 20k and 100k. Icesave made an agreement with DNB about this, as others (Argenta) have. Nothing wrong with that. And since the first 20k bit is solved now, there is no reason for the dutch anymore to moan and groan and blame the Icelanders.
Now, to the Icelandic commenters: hang on in there ^^ Can’t wait to visit your beautiful country again.
UK citizen “Martin” is a typical Conservative voter who should know better than believe newspaper reports of “Gordon Brown bullying Iceland” Yes, us over here know what Thatcher and her Tories did to the UK, only people in the SE of England vote for that party and we hope to God they never get in again. Gordon Brown did what was necessary by protecting the GB’s interests – as Haarde would for Iceland. Gordon Brown has had a lot of bad press lately but i’m sure that “bullying Iceland” was the last thing on his mind. This situation will be dealt with sensitively, courteously and professionally.
@Joakim,
The problem was that Mr Haarde *refused* to give any assurances that *any* money would be paid back despite an international agreement (see statement from Alistair Darling about Iceland reneging on agreement). Even several days after He *refused* to answer. I think under such circumstances and knowing the financial situation Iceland was in i.e. currency that has fallen off cliff, a credit rating close to junk bond status and empty coffers and then illegally freezing accounts, seizing the assets whilst unpleasant was a prudent thing to do. I think most people understand this has nothing to do with the average Icelander and it is unfortunate the Mr Haarde has managed to shape Icelandic public opinion to his advantage by inflating the use of anti-terrorism law out of all proportion (it was tool and means to an end and not an actual accusation that Iceland is a terrorist state. To feign shock and disgust is quite frankly disingenuous).
I don’t get the accusations about stealing money. Icesave was closing down, of course the accounts are frozen. Landsbanki was under restructuring and still operational, so for all we know the money was just moved to the parent company so that they repayments would come from there instead. But the british didn’t even wait the time it takes a bloody letter to arrive from Reykjavík to find out before launching attacks. “What were we supposed to believe when they didn’t say anything?” is not a valid excuse, they never said that they would not honor their responsibilities and so far we’ve had no reason to doubt Iceland’s word. After just one day Britain decided to freeze all assets Landsbanki would have to use to be able to pay back the money to the savers. No wonder you haven’t seen your money yet, you can thank Mr Brown for that.
Dear Icelandic people,
Please read about the elite of your own country who have got YOU into this mess – think carefully before you support them and criticise British and Dutch people for their justified and righteous anger.
According to this article (with photographic evidence) they are still sipping champagne and partying.
http://www.dailymail.co.uk/news/article-1076699/Pictured-Icelandic-billionaire-glamorous-wife-friends-drown-sorrows-failed-bank-totters-brink.html#
@icecold,
You clearly have no idea of which clause in the anti-terrorism law was invoked. The clause invoked was infact perfectly legitimate even though it seems harsh on the face of it. Nobody in their right minds would associate Iceland with terrorism and I’m sure most intelligent people would realise this was just a tool, a means to an end. I have no doubt that you are simply being disingenuous when you site the example of muslim terrorists (in which case they would seize the assets of the individual or organisation they are affiliated with).
“Brown and Darling should be responding to what they hear on tv”
He wasn’t. He was responding to comments made in private meetings as detailed in the BBC and as noted in other comments here.
The big difference here between Icesave and the loss of other retail banks is that previously nobody lost any money or had money locked up and taken abroad (effectively). The ones that did lose mountains of money were those with money in investment banks.
@Bug
“the moment you deposited in those high-yield accounts everybody was warning you about, you more or less elected not to have a serious voice in finance or economics”
Are you serious? Icesave was guaranteed as per international agreements. There was no reason to assume that they would lock customer accounts. If Haarde’s response had been a little bit more than side stepping and silence this thing would not have become such a problem.
“That precedent makes good old credit ratings obsolete”
You seem to think Iceland still has a good credit. It currently stands at BBB in Standard and Poors I believe. From Wikipedia “Anything lower than a BBB rating is considered a speculative or junk bond”. So figure it out for yourself.
If you deposited euros you will receive icelandic krona.
I am a British citizen living in Iceland and have been following both the British media and Icelandic.
I have to say that im ashamed of Mr Brown and Mr Darlings reactionary comments and actions which effectivly brought down Kaupþing bank,as if Geir H Haardes job is not hard enough at the moment trying to stabilize the country.
It is funny how the title of the article reads “The British brought down Iceland’s largest company with their abuse of power” but the Prime Minister made this statement, “They may have brought down Iceland’s largest company” I think that the press has a responsibility not to exacerbate this politically sensitive situation.
I don’t think the Icelandic banking model would have survived much longer, it was heading for a terrible crash. When it happened there was bound to be a search for culprits to blame: you’ve settled for bankers and the British government. If that helps, keep that belief. I wonder though if it would not be better to look to the future and work towards a more solid economy based on the wonderful fundamentals that Iceland enjoys, including the character of its people.
I’ve read a number of related blogs and “have your comments” pages over the past few days. It’s just plain obvious many writers – especially the most hostile ones – are equally above their heads when commenting on the events as Icelandic banking system was trying to conquere the world.
Especially those of you claiming Iceland stole something from you: the moment you deposited in those high-yield accounts everybody was warning you about, you more or less elected not to have a serious voice in finance or economics. If it was up to me, I’d cancel your right to vote too.
Iceland never stole anything, period. First of all regular Icelanders are victims in the sense they have to involuntarily back the banks, (until now) owned and run by a few businessmen. Look at U.S., do you think Joe Average benefited from, and willingly or justifiedly now has to support/cover for AIG or Lehman? Opposite to what I think has been going on in the US, in this case even the culprits probably were not dishonest per se but rather just incompetent and over-optimistic.
Iceland, like any country, has to back its banking sector, no question about that. Otherwise there cannot be a banking sector to act internationally. That national protection has to be international and equal in that too. But one of the hosts of Icelandic banking empire, U.K., took a harsh initiative to protect local interests above the survival of Kaupthing or the interests of people in other countries. The action essentially was the final straw to kill the Icelandic banking system. In particular, it killed off Kaupthing, robbing it of any liquidity (which was in the UK I understand) and at least any possibility to raise funds by selling off UK parts.
The statement Brown made as well as the action killed what was left of trust in Icelandic banking system. But along with that it killed a lot of trust in any banking system. The action taken by Brown makes a precedent where Anti-Terrorist Legislature can be used to protect purely local interests. That precedent makes good old credit ratings obsolete, and trust a lot more nation-dependent issue. Now would you buy Russian oil reserves which may be nationalised the day their governement learns of their value? Or have your headquarters in London where the governement may decide to de-capitate you for the local benefit?
Not that anyone should lose their money. But I don’t think Gordon-boy helped Brits even if Iceland’s case was isolated – the end result did probably not get any better with the bank now under administration. But Britain just contributed to the collapse of the global financial system in a major way.
Oh, I and by the way, I have nothing to do with Iceland except for a short visit once. But I happen to be an educated practitioner in the field of finance. I do wish that every saver gets his/her savings back in full and with appropriate interest, and I do certainly hope regular Icelanders can get on to living a prosperous life soon.
@Polar Bear Mania,
No this is not a done and dusted ordeal. Its not finnished until those customers recieve their funds in full. Very typically arrogant and icelandic of you to declaire the matter “done.” Take that Hugo Boss suit off and get back to your farm, you’re fooling nobody with that costume.
So, let me see if I get this straight.Landsbanki (icesave) is Icelandic and went bankrupt. The British authorities must therefor confiscate all assets of the Kaupthink bank, because…. well because the are Icelandic too, right? So next time 2 muslim doctors try to drive their burning Range Rover into an airport, the English police will round up all muslim? Is that how the Brown cabinet interprets these anti terror laws? Somehow that makes me really uncomfortable.
Yes, pm Haarde was not very clear in his English press conferences, but much clearer in Icelandic. I just do not think that Brown and Darling should be responding to what they hear on tv. I would hope that British politicians today would use diplomatic channels to get their information, you know, through ambassadors. If Churchill would have based his opinions of Germany only on nazi propaganda movies, who knows what language we might speak today in Britain. But he didn’t, because as a politician you are supposed to be just that bit smarter than the media.
And please, people, stop with the “you Icelanders”! You Dutch should have paid better attention with the whole ABN AMRO affair and with the Fortis debacle. You Brits should have had better rules in place to prevent that Northern Rock mishap, or HBOS, or etc etc. And you Yanks with Freddy and Fanny and Lehman and Bears and and and….
Kaupthink was Englands 12th bank and asked for £4bn of the £500bn bail out that the government in the UK has in place. They asked for less than 1% of that money AS A LOAN. And what did they get? They got the finger from Gordon and Alistair, that’s what. The same Gordon and Alistair who now puff up their chests to “protect the English savers and English jobs”. But in reality, they are the root cause of this mess!
While PM Geir H. Haarde is no doubt a decent man, there is also no doubt that he does not believe that a single person in Britain thinks of Iceland as a terrorist nation. He knows that the legislation used was simply the only tool at hand to attempt to prevent eight billion pounds belonging to very ordinary British people disappearing into thin air. Ordinary people,charities and ordinary tax payers. Many people here have their only resource in the world now frozen and are in despair.
British people have affection for the people of Iceland and it is a tragedy that the greed of a few bankers have led to this situation. Small and large nations need to ensure that those rattle snakes never have the opportunity to threaten our nations again. Every country large and small needs to regulate better and enforce regulation better in the future. Hopefully when the dust settles, we here in Britain will find ways of helping the fine Icelandic nation, a people we deeply respect.
So Iceland are permitted to steal money from 300,000 British people and we are supposed to be understanding? Come and talk to the charity who supports terminally ill children and had millions of pounds in an Icelandic bank. Explain to them that you just need a couple of days to regroup.
@Polar Bear Mania:The only reason that the matter with the Dutch Icesave customers is cleared is because the Dutch government is prepared to give a loan to the Icelandic Government. That is something to be grateful for. It would be nice if that was recognized by Iceland. The Dutch Government could also have confiscated all Icelandic possessions is the Netherland, Europe and in fact all over the world. The Icelandic Government made promises to Dutch and British savers that they could not keep.
In stead of apologies the only thing that came out of Iceland was: too bad for those foreign savers, but we don’t really care. Maybe not officially but Iceland did absolutely nothing to give any other impression. That is the real issue. The attitude of the Icelandic government. The attitude that I would have expected would be: Yes, we made a mess and yes we are very sorry for that. We will try to do everything within our power to undo the damage we did. At the moment we may not have the means to do so, so could we please come to some kind of an agreement.
If that would have been the message out of Iceland, I am sure that British government would not have acted in the way they did. The Icelandic PM has only made matters worse though. Especially for the Icelanders themselves because with all due respect: I think Iceland needs the rest of the world more than the other way around.
Even so, I still wish Iceland all the best, because the current situation must be very hard for your country. I also think we should be prepared to help Iceland if necessary. It would help though if the Iceland government would fully recognize their responsibilities in stead of blaming others.
@Martin,
Whether America or the UK have failed there own people or not (i think they have failed them, but then again as a democracy we voted them in) by letting the banks create this crisis is a separate issue. The issue is Iceland’s response, Icelandic banking’s overreach and the lack of a fall back fund that should have been available but wasn’t.
“A “thank you” to the Dutch government would be in order.”
Do you thing that the Dutch government would have walked away from this as they did if they knew they could get more? Iceland has stood up to its part of this crisis, IceSave in Holland was a Dutch bank and falls under Dutch laws and the EU laws.
This was landed according to agreement between the nations and has been taken care of, what you and I or for that matter anybody else say’s here will not change that.
@ Polar Bear
“We just needed couple of day’s to regroup and get to the bottom of the problem. At least so that the Dutch Icesavers would know that their money save”
You’re wrong again…
At maximum only 20.000 euro per person will be repaid. Accounts that held more will be refunded by the Dutch Central Bank. So… “money save”? NO, there is still a substantial part that Iceland promised to repay, and WON’T
– A “thank you” to the Dutch government would be in order.
@Polar Bear Mania
“We just needed couple of day’s to regroup and get to the bottom of the problem.”
That’s fine and admirable that Iceland had a clear head to do this. But the fact is the first thing that should have happened after illegally blocking people’s accounts was for Haarde/Icesave to reassure people that money would be returned. Repeatedly avoiding the question and refusing to answer inspires no confidence whatsoever. Haarde’s initial response was nothing short of lamentable.
@STE
“its funny how the icelanic’s are tying to pass the blame to the uk, you people let your economy get out of control and your government let the banks run whild.”
Right, and where does that leave the UK? Gordon Brown let the British banks run wild, and now the country is suffering from a house price crash and is being forced to nationalise its entire banking system. But rather than owning up to this, Brown is seeking to blame others. First America, now Iceland. Interesting also how Liberal Democrat and Tory MPs had questioned back in July whether the Icelandic deposit insurance scheme was adequately capitalised and had a reply from the FSA that there was “no cause for concern.” This from the self-proclaimed “world-class financial regulator.” The UK is a madhouse! Brown has failed the British people and is now looking for his own Falkland moment by bullying Iceland.
@Polar Bear Mania, You’re right, Haarde was calm. A bit too calm. If you refuse to answer questions on such a massive default people rightly think that you are going to just sneak off with it.
Imagine if you owed the bank money and then you defaulted on payment. They send you a letter and you don’t reply? What happens? Within a pretty damn short period you start recieving letters concerning the situation.
“You are quite right and this will be handled according to international agreements and through diplomatic channels not big words and hot-headed response.”
The international agreement is that you pay the first 20k Euros on the balance. No questions asked. There is nothing in the agreement saying that you can lock away peoples’ money. What Iceland did was *illegal* pure and simple.
“You cannot now run away from that responsibility.”
Pls. read the agreement done by the Icelandic government and the Dutch. Nobody was running away from any responsibilities. We just needed couple of day’s to regroup and get to the bottom of the problem. At least so that the Dutch Icesavers would know that their money save.
Done and dusted…
It is really very simple.
When Iceland entered into agreements with the EU and allowed its banks to operate in the UK and the Netherlands, you took on responsibility for those banks.
You cannot now run away from that responsibility.
I put my savings in an icesave account, knowing that the government of Iceland guaranteed my money was safe. Apparently the government made empty promises.
The Icelandic PM is simply in denial and living in an unreal world, along with his fellow countrymen, by blaming the British government for their desperate situation. The facts speak for themselves, how could a country with debts, 10 times their GDP ever hope to survive when the economic climate turned against them?
It wouldn’t be so bad, if the Central bank had reserves to back up their banks but we now know the cupboard is well and truly bare and the krona is worthless.
If you guys can’t manage your economic affairs properly, you deserve to revert to your previous state which was a developing, third world, dead end place with no future.
Hope you’ve enjoyed the boom time whilst it lasted cos it’s never going to return !!
“its funny how the icelanic’s are tying to pass the blame …”
– No there is nobody trying to pass any blame. But the reaction of the UK government was out of contrast with anything that would be considered normal.
its funny how the icelanic’s are tying to pass the blame to the uk, you people let your economy get out of control and your government let the banks run whild.
@Polar Bear Mania,
2. When Iceland defaulted on payment there was no reason to believe that Kaupthing might not do something similar
– Iceland never defaulted in payment and never was going to. The problem is huge, the nation is dealing with a dept 15x larger than it’s economic. No nation has ever had to deal whit this kind of problem before.
3. You’re right there was never such a statement. Because you prime minister…
– No again not right, he did take the time needed to answer and answer with calm
4. That’s fine for Iceland owing £8bn to people. Some people needed that money, …
– You are quite right and this will be handled according to international agreements and through diplomatic channels not big words and hot-headed response.
“Bring on the litigation. I hope Haarde is shown to be the complete bafoon that he is.” ;-) Good one…
3. You’re right there was never such a statement. Because you prime minister …
– No again not right, he did take the time needed to answer and answer with calm
4. That’s fine for Iceland owing £8bn to people. Some people needed that money, …
– You are quite right and this will be handled according to international agreements and through dimplomatic chanels not big words and hot-headed responce.
“Bring on the litigation. I hope Haarde is shown to be the complete bafoon that he is.” ;-)
“Apparently the Icelandic government DID tell the British Government that they would not deal..”
No that is not right, what happened is that a civil servant said in an interview that IceSavers could expect some 8 – 10% back. He was quickly corrected.
@Polar Bear Mania
Apparently the Icelandic government DID tell the British Government that they would not deal with the issue. This is what Chancellor Alistair Darling said last Wednesday: ‘The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here.
It this is true the British government had every right to to act the way they did. The Dutch (my) government approached this matter in a slightly different way, but there is no doubt in my mind they would have done the same within a few days if the Icelandic government had not change their attitude.
For what it is worth, I would like to say that as a British citizen, I am ashamed of the bullying that Gordon Brown and HM Treasury have engaged in against Iceland. What we see happening is that Gordoan Brown is in a desperate political situation because his economic policies have failed and made Britain the most vulnerable major economy to the current crisis. He first tried to blame everything on America but when that didn’t work, he saw the opportunity to look like a “hero” by making little defenceless Iceland into a villain. I have reviewed the statements of the Icelandic authorities and at no point did they say that they would not honour their obligations, but the fact is that the money is not there immediately because Iceland is currently not able to borrow on the capital markets and because assets of the banks must first be sold. If the UK wanted to be constructive, it would have worked with other Western governments and the IMF to provide Iceland with a liquidity backstop facility, rather than leaving them out in the cold and going cap in hand to the Russians.
Gordoan Brown’s cynical behaviour unfortunately puts on full display the madhouse that we live in here in the UK, where the government can decide to use terrorism laws to seize anybody’s assets. The UK deserves to be shunned by foreign investors in response.
I think that Gier Haarde made a mistake by closing the bank accounts down and not making any statements about what was happening.
I have savings with Icesave that I can no longer access, did he think I (and all the other savers) was just going to forget the money.
If he’d closed the bank accounts to Icelanders as well I’d have felt a bit happier, but allowing them full access to draw their money made the situation worse.
I’m glad that Gordon Brown put pressure on Iceland, but I do think that the UK and EU should support Iceland in this crisis.
We, Iceland’s allies, should help and not force her to turn to Russia for help while we stand by.
@ Polar Bear Mania
“There has never been any statement by the Icelandic government that Iceland would not deal with huge problem and stick by its obligations”
Neither there has been a statement they would. And that DOES look like “We don’t even think about it”.
I am happy there is an agreement now. I hope that the Icelandic government will stick to that agreement now. And not take the loan and run again.
@Polar Bear Mania,
2. When Iceland defaulted on payment there was no reason to believe that Kaupthing might not do something similar
3. You’re right there was never such a statement. Because you prime minister consistently side stepped the question posed and refused to answer, how else are we supposed to interpret it?
4. That’s fine for Iceland owing £8bn to people. Some people needed that money, y’know like for living. Instead Icelanders have access to foreigners money which they deposited in good faith.
Bring on the litigation. I hope Haarde is shown to be the complete bafoon that he is.
Geir Haarde hasn’t got a clue what he’s talking about. The terror law, whilst on the face of it seemed inapplicable was in fact a perfectly legitimate tool to use to seize the assets, as one is want to do if there is an £8bn default of payment. The clause allows assets of any individual, organisation or nation to be seized if that entity is seen to be doing damage to the country in any way. Yes, it is broad, but equally it is applicable. £8bn is a staggering amount of money to be defaulting. This is not investor money that is inherently risky, this is customer money that by rights should have been secure and guaranteed to the tune of 20k Euros by the Icelandic financial authority. The Icelandic authorities instead were unable to meet those guarantees and locked customers out of their accounts whilst still allowing Icelanders to withdraw money. The Netherlands experienced similar problems to the UK, but they did not seize any assets before Iceland stole off with the money. Consequently their people have even less assurance that my Geir Haarde will come up with the goods and meet his obligations.
I hope Iceland does indeed litigate as this will just bring into full view what a complete idiot Haarde has been in his response to the situation.
Remember that icelandic goverment took all of icesave deposits out of the uk before telling anyone!
I ask you what next anything to get out of this , your prime minster is cluching at straws
The Britsh goverment had no other choice but to protect its depositors what did he expect to let happen with the rest of the banks as what did icesave!
come on!
What I find amazing here is the panic struck reaction by the British government and how the big worded statements where used instead of looking at the whole picture and going through diplomatic channels.
Couple of things to have in mind:
1. In simple terms; When banks stop trusting banks that chain reacts and impacts the Icelandic banks hard, they can’t refinance them self’s and end up struggling for survival leading to what has now happened.
a. This is true for Landsbanki and Glitnir. But not so for Kaupthing as it was the UK government that did that single handedly by enforcing terrorist laws (Right or wrong) on a friendly nation.
2. When it is clear that Landsbankin/Icesave cannot keep on the Icelandic government is forced to take over. Having to deal with the fact that banks many sizes bigger than the economy of the country are struggling the first thing that needs to be done is to assess the situation and then give out statements.
3. There has never been any statement by the Icelandic government that Iceland would not deal with huge problem and stick by its obligations
4. What Iceland has how ever done is to review the situation in a calm manner and try to get an over view of a crises that is nearly 15 times larger than Iceland economy
The foreign media is making it look as the Icelandic government is not going to stand by its obligations, that will not be the case the problem is the size of the crisis for the country.
Let’s keep calm these are hard times and we need to stick together to find a solution