The Home Rule government of the Faroe Islands has decided to extend Iceland a loan of DKK 300 million (ISK 6.1 billion, USD 50.3 million). All the political parties in the Faroese parliament have backed the move.
A statement from Faroese officials says that the islands and Iceland held a meeting earlier today in Helsinki, where the Nordic Council is currently meeting. MBL.is reports that the difficulties in the Icelandic economy were the subject of the meeting, in particular the country’s need for foreign currency reserves.
Faroese government representatives discussed the issue with all parties on the Islands and decided to offer Iceland a DKK 300 million currency loan to be credited to the Faroese national account at Iceland’s Landsbanki Bank.
The loan must still be rubber stamped by parliament when it is officially in session.
The Helsinki meeting was attended by Kaj Leo Johannesen, the First Minister of the Faroe Islands, Jorgin Niclasen, Faroese Foreign Minister, Johannes Eidesgaard, Finance Minister, Geir H. Haarde, Icelandic Prime Minister and Arni M. Mathiesen, Icelandic Finance Minister.
Many Icelanders are taking the loan as a sign of the country’s close and longstanding relationship with the Faroe Islands, a self-governing part of Denmark. But many Icelanders are also uneasy about taking money from such a tiny nation – despite the amount of money on offer being largely symbolic.
Even though I am very critical indeed of the Icelandic government (and also of the setting up of websites against Britain), I must say that as a German I feel rather ashamed to read such a news story.
Come on, Germany has put a rescue package of 500 (!) billion euros for its domestic banks. Okay, most of it are guarantees for loans and interbank-lending. Even so, couldn’t it be possible for large European countries like France, Spain, the UK, Germany and the Netherlands to help Iceland as well? What a sad moment for a European that a fellow European country, a country with close ties to the EU needs to rely on a loan of such tiny a nation and cannot rely on the help of its strong European neighbours.
Good to hear indeed that at least the large nordic countries will probably come to Iceland’s help.
I guess this wouldn’t have been even discussed if Iceland was part of the EU. Now it’s very sad to realize no one really care of Iceland. Moreover I find the IMF loan kind of small. 2bn where Iceland would need 6bn. And Ukraine gets 14bn?
hopefully the Faroese being first to speak are going to be followed by their wealthy nordic brothers.
There are 46 million people living in the Ukraine, Koben, and only 305,000 in Iceland.
Per head, the IMF loans work out at just over $300 for the Ukraine and $6,560 per head for Iceland.
That’s quite a lot of money for Icelanders to pay back.
Probably, Koben.
I still think it is a disgrace that people in Germany do not even talk of the possibility of coming to Iceland’s help. And I guess that is the case in most of the other European countries as well – with the notable exception of the nordic countries!
>I still think it is a disgrace that people in Germany do not even talk of the possibility of coming to Iceland’s help. And I guess that is the case in most of the other European countries as well – with the notable exception of the nordic countries!
Germany is going to lose the $21 Billion its banks have lent Iceland. Do you really want to give it even more.
The estimate is that only 10-15% of the $60billion Islandic debt will be repaid by Iceland.
Not surprising that nobody wants to lend any more, is it?
I’m confident the other nordic countries will do whatever it takes to get Iceland back on its feet, anything else would hardly be accepted by the public opinion. The 4bn still needed is a huge sum for Iceland, but quite manageable for the nordic countries as a whole.
People tend to forget that the banks have assets that would cover the debts if they were sold
but this takes time, all the banks money was invested, and most of it in UK
its not like the money vanished into thin air
it seems to me that disturbingly large part of the discussions about this subject is very simpleminded
iceland has a bad bad bad reputation. Do you have any idea how many people and institutions lost money to your crappy banks and your government not living up to their guarantees? You have been PROVEN to not be trustworthy. No wonder you have a hard time getting money.
I’m happy to see that there are supporting each other. This should be an example for the UK. Their action was overdone, and caused even more problems to the country. You should think that more nations would stand together to support Iceland. The Netherlands has reached a agreement quit fast after the collapse of the banks. Most savers will get the first 100.000 Euro’s back from the Dutch goverment, and the Icelandic state will pay this money back in a loan, they were given.
In this time we should stand united as one Europe, and Iceland is definetly a part of Europe.
Hopefuly the other big nations will follow the example of the Nordic countries.
After all, it were not the Icelandic people who caused this chaos, but only a handfull of bankers, wich were to greedy. The Icelandic people will have to suffer from this, in the years to come
Peter – London:
> Do you really want to give it even more.
No, certainly not. We are not talking about gifts to banks, but about a loan to the government. And Axel is quite right, a lot of money will be lost, but a lot of money will also be returned.
However, I gather from the German press that the German government is much more concerned about the financial stability of countries like Pakistan than about what happens with Iceland in the near future.
@Axel. Whilst I agree with you, the 10-15% is a quote from Oddsson in that Icelandic interview, IIRC.
Presumably those assets are not going to realise anything like their book value as (a) it’ll be a firesale and (b) the valuations are out of date.
“Even so, couldn’t it be possible for large European countries like France, Spain, the UK, Germany and the Netherlands to help Iceland as well?”
Why? What have they ever done for us? 30000 of our countrymen are worried about heir savings that they had in an Icleandic bank. They had confidence in the official guarantee and all the encouraging statements from the Icelandic government. And now look at this mess! Really, should we support THIS irresponsible government with credits? Let’s wait til the Icelanders get rid of Haarde and Oddsson, and only step in after that. Help those who help themselves.
Iceland’s fearsome independent streak is not helping it at this time. There is undoubted anger across western europe by those who have lost money – not through the fault of normal Icelander – but certainly through the incompetence, irregulation, nepotism of the country’s institutions. The UK may not have helped, but there is far more sympathy for it’s case outside the country than Icelanders think. The image portrayed is that of a country aiming it’s anger in the wrong direction. 60,000 sign the anti UK petition, yet at most, 2,000 attended a tame demonstration protesting at their own government.
It’s rejection of the EU counts. Your insurer is not going to be as welcoming the day you ask to sign up after your uninsured house burns down, as he might have been before. That’s life.
Peter makes a salient point. German banks are in for a hammering from the Icelandic banks. The government cannot be criticised for reticence in pumping yet more money in when there has been so little contrition from the country in need.
Trevor
There is no anti UK petition, where did you see that?,
90% of Icelanders are against David Oddson according to the latest poll
my guess is Haarde is close to that number himself
but we cant change horses in the middle of a river so to speak, they will be replaced soon,
the banks operate under EEU laws that allow them to do pretty much what ever they want, we can not tell them what to do, i know you dont want to hear this but KB was in very good shape when Brown decided to destroy it, this will all come out soon
just like the lie Darling told the BBC when this fiasko started.
This is a cruel world. In this crisis we cansee everybody’s true face. Good chance for every EU member to know each other’s real personality.
>Mike Smith
Indeed seeing that way is of course understandable. Living in Iceland, you tend to forget such thing and (no offense) see yourself as Icelanders, in the center of the earth :P
What I don’t understand is – Why haven’t any of these bankers been jailed or imprisoned for gross negligence???
It happened to rogue trader Nick Leeson back in the nineties, why does the same not apply here???
As for taking a loan from the Faroes, we are well and truely the biggest joke in Europe – if we’re lucky, maybe Zimbabwe or Rwanda are handing out loans too….
Dear lord!
Wim, Netherlands. I think the case is closed in Norway and that the bank customers of Kaupthing has got/are getting their money back these days – up to about 230.000 Euro (NOK 2.000.000). I am not absolutley sure, but I have heard that are about 5 customers who probably have lost money in Icelandic banks. Glitninr is still active. Because customers haven´t been affected, there have been no real public discussion about this. In fact, it seems that some people with hidden fortunes in foreign contries now wants to bring their money back to Norway.
I think any help, even from a small economy as the Faroes gives positive messages.
I am a British saver in Kaupthing Isle of Man and stand to lose most of my life savings, but I still wish Iceland people prosperity again. I do not have anything against the Icelandic people and I say we should all try to help each other.
Amazing, Copenhagen pay them DKK 615 million every year to keep them afloat. Which is an absolutely outrageous amount of money considdering they are only 48,470 people living there.
And now they can even start lending out money?
I wonder what Copenhagen thinks of how danish tax payers money are used.
How much money does Iceland need?
1.1B extortion loan from Netherlands
4.0B extortion loan from UK
2.0B from Dutch savings
1.XB from Isle of man savings
?.?B from Guernsey savings
4.0B from Russia?
2.1B from IMF
0.05B (extortion?) loan from Faeroe Islands.
1.5B currency swap from Scandinavia.
That’s more than 120%GNP.
(X.XB in future for not paying bills because that would not be in the interest of Iceland??)
p.s.
So far i see Iceland as a bunch of pirates that has no intention of paying its legal let alone pay it moral duty. (for example they told the English not to expect any money and after a speech from from Haarde that everything is fine told the same to the Dutch)
p.p.s.
If you are not bankrupt you should pay all your bills. So far i see only tricks for preventing that, like giving all Kauptings art to the government for zero? amount.
I see Pravda quality news and less than Gazprom mentality of law and business
To Wim You’re to optimistic. The Dutch Government pays the Euro 100000, the Icelandic government should eventually pay back the first 20800 Euro to the Dutch government (which they suggested to pay in krona, (a change of law from Iceland in the beginning of October).
The English took the banks because large sums of money where being transfered to Iceland Once transfered perhaps always lost. I Wished the Dutch government had been so active, they had more than enough reasons since June!
Aihan :
“This is a cruel world. In this crisis we cansee everybody’s true face. Good chance for every EU member to know each other’s real personality.”
Iceland isn’t in the EU, if it were it would have been bailed out like any other EU country. In fact it would not have been allowed to such massive speculative gambling get so out of control.
But Iceland wanted its cake now and is finding the price.
Don’t expect the EU to save you or the countries that Iceland’s banking Mafia have robbed, to have much sympathy.
@ Øystein;Norway :
There are 469 Dutch people, who had more than 100.000,- Euro’s at Icesave (Landsbanki).
@ Jim: We’re on the same page.
@ Ron: These are loans. I’m sure that there are no other goverments going to loan money to Iceland, if they think that they would’nt get it back… Iceland is -still- a rich country, with many natural recources.
You may blame the bankers who took to high risks, and the goverments -also in the rest of western Europe – who allowed them to do so. The Icelandic people are certainly no pirates, and most deffinatly no terrorists.
I have some money in Iceland, because i do some bussines there. This might be the end of that, but we will see. The way i see it, is that there are some institutions wich have boroughed large ammounts to the Icelandic banks. These transactions are normal bussines transactions, and these institutes know the risks. I’m therefore also not complaining about my money, wich i can’t get out of Iceland. These risks are normal for all bussines.
Offcourse it is a different story for private savers, who are putting their savings in a bank wich is located in their own country. All people should trust there local goverment to look after their savings with a bank wich is allowed to do bussines in their home country. Therefore the Dutch goverment garantees the savings up to 100.000,- Euro. This was 20.000,- I have to atmit, that the first few days, the Dutch goverment did’nt want to pay anything, and refered to the Icelandic goverment! I think that this was legaly not possible, so they came up with this solution.
Do’nt forget that Iceland is a small nation with only 300.000 people, and no army, what so ever. It has been verry poor, and just the past couple off decades has been verry prosperous. We should all admire that.
To freeze all Icelandic assets in the U.K., is an act of war. This has caused the collapse of Kaupthing, the biggest bank in Iceland, and brought the country in even bigger problems. This seems to be politics. I’m sure that Brown would not have concidered these actions, against a bit more bigger nation, with more influence.
@Peter: Iceland is not inside the EU, but it does belong to the EEG, and Nato.
Futher on, it is a Eoropean country, and we should not be argueing in 2008 with each other.
I do however agree with you on the banking mafia. There have been some people in the banking industry, who have stolen our money, and knew exactly what they were doing. Not only in Iceland, but all over western Europe.Hopefully they will be brought for justice.
Please let us not condam the Icelandic people, but the bankers, and goverment, who are responsible for this.
We are happy to help our beloved nabours. I hope the rest of the nordic countries will follow our example.
Dont listen to GreatDane, he truly doesent know what he is talking about.
>Dont listen to GreatDane, he truly doesent know what he is talking about.
A name from the past, that one!
Actually, he really does. He said that the subsidy was DKK 615.
CIA factbook say somethink like USD 150.
An interesting little factoid that has come out since this article was first published and commented on. The loan is at 5.25%, so whilst it was a nice gesture and all, it’s hardly charity. That’s only .25% below what the evil UK & NL (boo!) want.
Exchange rate is about USD 1 : DKK 5.
So about DKK 650. Actually, it mihght even be higher – they say 15% of GDP and I took the PPP one, as that was a better fit with GD’s statement. Using the (to me) real exchange rate one is more sensible, which would give USD 255, DKK 1,275.
“Do’nt forget that Iceland is a small nation with only 300.000 people, and no army, what so ever. It has been verry poor, and just the past couple off decades has been verry prosperous. We should all admire that.”
WHAT SHOULD WE ADMIRE? THAT A COALITION OF MAFIA POLITICIANS AND BANKERS WHERE THE AUTHORS OF THE ROBBERY OF THE 21ST CENTURY? THE ICELANDIC JOB? ARE YOU PROUD OF THEM? DO YOU ADMIRE THIS? THAT A WHOLE NATION HAS BEEN FOOLED, MAKING YOU BELIEVE THAT YOU WHERE RICH, PUTTING YOU INTO GREAT DEBTS THAT NOT EVEN YOUR GRANDCHILDREN WILL FINISH TO PAY? MAKING YOU BELIEVE YOU WHERE THE RICHEST NATION IN THE WORLD WHEN IT WAS ALL ABOUT FINANCIAL SPECULATION AND NOT SOLID GROUND FOR IT?
THAT IS WHAT HAS HAPPENED DURING THE LAST TWO DECADES IN ICELAND, IF YOU WERE WISER AND HAD CHOSEN A MODEL OF REALISTIC GROWING, DIVERSIFICATION OF ECONOMY ETC… THIS NATION WOULD BE IN A BETTER SHAPE RIGHT NOW.. BUT NO, YOU WENT THE EASY WAY, WHERE WAS THE ICELANDIC MIRACLE BASED ON FISH?? OR BANK SPECULATION??
I DON´T THINK WE ADMIRE ANYTHING OF THIS, IT JUST MAKE THE INTERNATIONAL COMMUNITY LAUGH AT THE PEOPLE WHO WERE PRESENTING THEMSELVES AS THE IDEAL SOCIETY OF RICHNESS AND DEMOCRACY , AND AT THE END IT WAS JUST ABOUT CORRUPTION… AND SPECULATION
WIM ” Iceland is -still- a rich country, with many natural recources”
WIM YOU TALK ABOUT ICELAND AS IF IT WAS BRAZIL, OR ANY OTHER OF THOSE COUNTRIES WHERE YOU CAN FIND GOLD, DIAMONDS, WOOD IN GREAT QUANTITIES, MINERALS, OIL, ETC…
ICELAND ONLY HAS FISH ( NOT AS MUCH AS THEY HAD BEFORE) LIMITED ENERG Y RESOURCES THAT JUST CAME TO LIGHT NOT EVEN ENOUGH TO MAINTAIN ALL THE ALUMININUM FACTORIES THAT HAVE BEEN BUILD. AND WATER… WELL, YOU CAN COUNT SHEEPS AS A NATURAL RESOURCE IF YOU WANT..
SO ICELAND HAS, IN COMPARISON WITH OTHER COUNTRIES WITH GREAT AND DIVERSE NATURAL RESOURCES… VERY LIMITED RESOURCES, ALMOST NOT INFRASTRUCTURE TO TALK ABOUT, NOT IMPORTANT INDUSTRY, NOT EVEN A DECENT PRODUCER OF TECHNOLOGY..
CAMMON, STOP LIVING ON DREAMS OF “WE HAVE RESOURCES, WE ARE RICH”, ALL YOU HAVE IS AN UNDEVELOPED COUNTRY, YOU ARE JUST A PUNCH OF FARMERS AND FISHERMEN ( WHICH IS VERY RESPECTABLE ) BUT DOES IS NOT ENOUGH FOR MAKING YOU RICH, AS IF YOU WERE IN THE ARAB EMIRATES OR ANY OTHER COUNTRIES WITH GREAT QUANTITIES OF HIGH VALUABLE RESOURCES…
ICELAND IS “STILL” RICH? IT HAS NEVER BEEN RICH AT ALL… JUST A COUNTRY HIGLY IN DEBT, A SOCIETY WHERE NO ONE OWNS BUT OWS WHAT THEY HAVE TO THE BANKS… AN SPECULATIVE DREAM…
GO FISHING, BE NICE TO THE FOREIGNERS WHO COME TO SEE THIS ICED LAVA LANDSCAPE, COOL DOWN YOUR AIRS OF SUPERIORITY AND, WHAT IS MOST IMPORTANT…
PAY BACK YOUR DEBTS AND REGAIN AT LEAST THE TRUST OF INTERNATIONAL COMMUNITY… BUT AS LONG AS YOU PLAY LIKE THIS YOU ARE GOING TO BE LEFT PRETTY ALONE… DEPENDING ON YOUR NEIGHBORING COUNTRIES TO GIVE YOU SOME COINS LEFTS…
AXEL “it seems to me that disturbingly large part of the discussions about this subject is very simpleminded”
MAYBE YOURS?? PLEASE. SHOW A LITTLE BIT OF RESPECT TO THE COMMENTS OF OTHERS HERE, MR. EINSTEIN… THERE IS A LOT OF GREATNESS IN SIMPLICITY…