Iceland’s voters expressed their outrage on Saturday against bankers, the government and what they saw as foreign bullying, overwhelmingly rejecting a plan to pay $5.3 billion to Britain and the Netherlands to reimburse customers of a failed Icelandic bank.
With all but 2,500 of the 143,784 votes counted, the authorities said, 93 percent voted “no” and 1.8 percent voted “yes” in the first public referendum ever held on any subject in Iceland. The remaining ballots were declared invalid.
But the referendum was more symbolic than substantive, and the Icelandic government hastened to make clear that Iceland would still pay back the money, albeit on different terms from the ones rejected.
[...]
How to repay the debt, which represents more than 40 percent of Iceland’s gross domestic product, has consumed this small, isolated nation for the last year and a half, since its banks failed, its stock market crashed and its currency collapsed.The money represents a portion of the losses incurred by more than 300,000 Dutch and British customers of Icesave, an Internet branch of the Icelandic bank Landsbanki. The bank went bankrupt in October 2008, along with 85 percent of Iceland’s banking sector. The Netherlands and the British reimbursed their citizens, and are now pushing to get the money back from Iceland.
The three countries have been fighting over the deal’s terms ever since. An agreement this fall that would have given Iceland 15 years to pay the money, at 5.5 percent interest, only narrowly passed the country’s Parliament.
But on Jan. 5, [Icelandic President] Mr. Grimsson unexpectedly refused to sign the bill into law, setting off the need for a nationwide referendum.
Seems to me the referendum was a stunt by the government to let the public vent and try to get them onside. I suspect Americans would have voted similarly had the US had a referendum on the bailouts.
3 remarks:
1. Iceland did reimburse their nationals who deposited money with Icesave but did not pay foreign nationals; that is discriminatory under European regulations
2. Iceland ministers and banking authorities repeatedly assured UK and NL banking authorities that the guarantees were there, even after Icesave’s parent company was taken over by the state
3. pilgrim #40 (departed from Holland, father?)
You can’t expect a country to give money to a country that is screwing you at the same time. F yourself.
#35 Nobody, The last time I looked Bloomberg News was not a tabloid.
“The U.K. deployed anti-terror legislation to freeze Icelandic assets as uncertainty about cross border banking rules left doubts about which country should bear the cost of covering the claims.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a685sXUNswAw
Semantics aside, the UK has played very dirty with Iceland, even after Royal bank of Scotland got bailed out for Billions of Dollars by the U.S government. A bunch of hypocritical British crooks.
http://www.heraldscotland.com/rbs-will-get-billions-in-us-bail-out-of-economy-1.826927
Good for them. It shows they have more gumption than the American Congress. It also shows they know corporations are inherently amoral and should always be heavily regulated or face nasty consequences. Or that they just want revenge on the robbers who stole from them.
All this talk about this being the fault of capitalism is missing the point I think. What we really should beware of is governments. I understand the socialistic ideal, and the benefits of that, but the fact is that most governements are really corrup, and socialism puts more things in government control. Really, I think there is a case to be made for anarcho capitalism with no involvment of the state. Patents, IP rights and corrupt legal systems, or money hungry politicians wouldn’t keep big companies from being overthrown by smaller ones.
Complete BS Johan. The governments in the Nordic countries are the most socialist in the world and consistently the best run. It is due to transparency and accountability of all involved in the government (not just the politicians)that make government run so well.
The problem in Iceland as most of the world was not due to too much government but not enough as a result of ideology of free market fundamentalism. If the government in Iceland, England, or the U.S. was far more involved like in Canada then you have the banking problems at all. In Canada there was no banking crisis.
#41 SomeBody, don’t need to, your Mom’s here,
but thanks anyway
All this talk about credit, foreign currency and whatnot does not even begin to touch on how money even operates in this world. For all the pro-banker people here, how on earth can you explain something that’s meant to be tangible but is actually printed from thin air and then loaned to governments that must be repaid with interest? How can it be that if I (as a government) start out with no income but only my resources at hand, take on a loan in a currency which was never mine to begin with and be expected to pay it back with interest based on currency that is still the borrower’s and not mine?
How does it get repaid? With my assets. What are my assets? My country and its resources. How does one determine what is a reasonable amount of my resources to exchange for this currency that was made up by someone? Ask the bankers … they tell you how it is going to be, not the other way around.
The point being, currency should always be borne of and managed by the governments of their respective countries and NOT by bankers external to the government. By allowing Federal Reserve Banks and the fractional banking systems to be established, our governments sold not only their assets but their own and their people’s control.
Nobody, crap on all you like about how guarantees work and whatnot but the reality is that this is how countries are bought and sold. It’s the stealthy way to do it and when the stealth approach fails (as it appears to be with Iceland’s resistance), the big bullies come in and wage a war.
THAT’S reality and no economic or financial “guru” will ever admit that the monetary system is one gigantic lie to take all the toys from the kids’ sandbox and keep them all to themselves for no good reason at all other than pure greed and disrespect for their fellow humans.
@46 Pilgrim
Bloody necrofiliac