A report on the effects of British anti-terrorism legislation on Iceland has been released. It is believed Icelandic companies were impacted by ISK 5 billion due to the British government’s actions during the banking crisis.
The report was distributed to Icelandic parliamentarians yesterday and claims that the total loss inflicted by the UK at the time is around ISK 2-9 billion (EUR 12.5-56 million) — but probably around five billion (EUR 31.1 million).
The UK government imposed restrictions on Landsbanki and Iceland itself at the height of the banking crisis in 2008 in an effort to stop money being sent “into a black hole” in Iceland. The British government has consistently claimed that the law used was entirely appropriate; but it was a law rooted in anti-terrorism legislation and was harshly criticised within Iceland. Such restrictions on capital flow are highly unusual and damaging between neighbouring allied nations; but London maintains that they were justified at the time the Icelandic banks were imploding.
The new report’s author asserts that the results are a guide only; largely because of how difficult it is to draw a line between the impacts of the terrorism laws and more general impacts related to the collapse. Despite the qualifications, it is still clear that the British actions did negatively impact the Icelandic economy at its most fragile moment.
40 company managers were interviewed for the report, Visir.is reports. In the interviews, they were asked about how the terrorism legislation affected their businesses. The emphasis was placed on Icelandic import and export companies, and banks and financial services companies were excluded. The researchers also took information from the Central Bank of Iceland and the FME national financial regulator and economics experts. The report also goes into the wider impacts of the restrictions and foreign media coverage of them.
Opposition Independence Party MPs first requested such a report a year ago and the report presented was compiled on the initiative of the Ministry of Finance. IFS Analysis conducted the research, expert analysis and production of the report.