STATEMENTFROM THE PRESIDENT OF ICELAND:
Following a misleading report of an interview with the President of Iceland Olafur Ragnar Grimsson in the Financial Times Deutschland the President wants to emphasise that in his discussion with the reporter, he pointed out that there was a clear and strong will to honour the commitments of Icelandic financial institutions in other countries as had been demonstrated a few days earlier when it was declared that the depositors of Kaupthing in Austria, Norway and Finland were to be fully compensated.
It was, however, important that people in other countries, including our friends in Germany, would appreciate that the people of Iceland, ordinary citizens, families, pensioners and others had suffered great financial losses.
It was a misleading view, held by some in other countries, that the citizens of Iceland would be compensated fully while people in other countries would suffer losses. The President said that it would take time to work through these difficulties but that the results in Austria, Norway and Finland clearly demonstrated, that the Icelandic authorities and institutions were trying to do their best, in accordance with earlier statements made by the authorities and the banks.
In addition, the President emphasised in the interview that the existing European banking regulatory framework allows banks to operate across the European market, whereas regulatory bodies are restricted by national boundaries.
In a much needed reform of the European financial system it would be important to correct this imperfection.
10. febrúar 2009.
Germans were two times in the 20th century with debts more than they could pay, like Iceland now. They were let off both times, so they should have some patience about such things now.
If they do not want to they should talk to East Germans how they liked being made to pay all the way when the West ones were forgiven debt.
@Physchim62
Here’s a link to the article (in Norwegian) I mentioned:
http://www.nrk.no/programmer/tv/brennpunkt/1.6322990
I guess it sort of explains why protesters raised the Bónus flag over the Icelandic parliament building, and reaffirms the observation that if you owe the bank enough money, suddenly you’re pulling the strings, not the bank. The question is how people got to borrow so much money in the first place.
@Horse,
the most worrying thing is that Glitnir (soon to be Islandsbanki) has yet to admit the size of its Icelandic loan book. The published figures (so far) are all after depreciation for debts which it doesn’t believe will be repaid. Landsbanki has written off 50% of its Icelandic Loans, Kaupthing 66%, how much did Glitnir write off, that is the question!
Was this really a mistake on the part of President Grimsson? The Financial Times Deutschland is a savvy newspaper known for its excellent journalism skills.
On possible thought is President Grimsson whom while apolitical due to his role was being coy and political during the interview with the FT Deutschland.
Before assuming the head of state role he was very active in the “Left-Green” political party (now in government) and they are currently anti-EU membership. What better medium to make you views know on the issue than make such statements about a founding member of the EU. It’s a good way to get Berlin’s attention and others too.
“Kaupthing alone had 1409 billion krónur of loans to Icelanders”
There was some material on this in the Norwegian press late last year, apparently. If you follow the threads you get to a certain clique of investors and some disturbing reports of media censorship in Iceland. Perhaps the Icelandic electorate should examine in more depth the record of those who were running the country over the last few years and how they were running it.
This latest embarrassment makes even clearer the sad conclusion that Iceland does not dispose of the intellectual or political resources needed to cope with this crisis. The current caretaker government is in disarray and simply does not have the authority to drive the financial process forward. Iceland is losing time and becoming increasingly less appealing to its creditors and supporters because it is waffling over taking the hard decisions needed to put the country on track to regaining public confidence and resolving the doubts of its creditors. Until it does these things, it will continue an aimless drift …
“the existing European banking regulatory framework allows banks to operate across the European market, whereas regulatory bodies are restricted by national boundaries.”
Kaupthing alone had 1409 billion krónur of loans to Icelanders, of which its new management want to write off two-thirds (at least according to the last published estimate: http://sedlabanki.is/lisalib/getfile.aspx?itemid=6606 p.16). That’s 954 billion krónur (at least €3bn) which will stay in the Icelandic economy and not go to Kaupthing’s creditors.
Who was supposed to be regulating Kaupthing when it was lending money to Icelandic customers? The British and the Dutch if you believe Iceland’s increasingly embarrasing President.
[…] Diese Klarstellung wurde auch in Island veröffentlicht, siehe Iceland Review (auf […]
As well as sounding different, it’s also a lie.
>It was a misleading view, held by some in other countries, that the citizens of Iceland would be compensated fully while people in other countries would suffer losses.
This is untrue. If the assets of any Icelandic bank are not enough to repay 100% of deposits, the following situation will occur:
Say the recovery is 80%. All depositors will get 80% from the bank. The remaining 20% is lost. (The EEA guarantee, if applicable, will not really make a difference at that level of recovery.)
The Icelandic government has guaranteed Icelandic deposits, so they’ll pick up the tab for the remaining 20%. Therefore German depositors will get 80%, Icelandic 100%.
Not that I believe that there’s anything wrong with this, but let’s be clear. “Citizens of Iceland would be compensated fully while people in other countries would suffer losses.”
destilated content of this statement:
austria, finland and norway kaupthing customers where compensated because they were a few and iceland had the money. germany, sorry, gets nothing.
thats the fact.
thanks
Now, this sounds quite different. Really, it’s always the same with Grimsson: He regularly makes outrageous statements that he has to take back the next day. It would be much better if he let his wife do the talking. She seems to be a very reasonable person who doesn’t create such misunderstandings. Dorrit for president!
:D