The Norwegian newspaper Klassekampen published an interview on Friday with Iceland’s soon-to-be Left Green Party Minister of Finance. Steingrimur J. Sigfusson appeared on the front page of the paper under the headline, “Liking the Norwegian krona”.
Sigfusson says in the interview that he has requested talks with the Norwegian Finance Minister Kristina Halvorsen on the expansion of financial co-operation between the two countries. She has been invited to Iceland at a time which coincides with the Left Green Movement’s tenth anniversary: the 6th and 7th February. The Norwegian krona is considered by some to be an alternative option to Iceland taking up the euro.
Sigfusson said in the interview, among other things, that the Left Greens firmly believe that entry into the European Union does not best suit Iceland’s national interests.
So Icelanders like the NK? They want Norway to give them $6-10 billion by printing NK to replace ISK? That would result in an immediate devaluation of the NK by 10% or so. Or do you want to pay for them with dollars or euros which you don’t have?
And Iceland wants free credit lines from Norway, so that the Norsk Sentralbank will act as a lender of last resort to the Icelandic banks or government. What if the Icelandic government defaults and can’t service its debts? You want Norway to hand over $5-10 billion to rescue you? Or what about the banks’ debts of $20-25 billion? You want Norway to pay for that too?
What a joke.
Norway doesn’t owe Iceland anything, and has no financial or moral obligations to help Iceland. Norway handled its economy responsibly, Iceland handed its economy over to a gang of criminals, with predictably disastrous results. You Icelanders collectively screwed yourselves, you get yourself out of your hole. Your problem is too big for Norway or even all the Scandinavian countries together.
If Norway did give Iceland any money, it would just go to pay off the English and German creditors. Better to just send over a couple of shiploads of oil and food to keep you alive. Besides, any Icelander who wants a job can get one in Norway, maybe it’s cleaning toilets, but that’s better than starving here. Or do you want Norway to guarantee you high-paying jobs as webdesigners and interior decorators and bank managers?
Someone mentioned this currency possibility earlier to one of the Norwegian ministers in a tv interview. He laughed at the idea.
Also, Klassekampen (“Class Struggle”) is a little leftie newspaper that is passed around for free on universities. Nobody pays any attention to what they say, they only printed the interview because Steingrimur J. is a Left Green.
And don’t forget that Norway has economic problems of its own. “Norwegian industry confidence dives to record low” say the headlines.
I have a solution to Iceland’s problem. Move the Althingi and all the government and bank offices to Vestmannaeyjar or some krumaskot like Grimsey or Hrappsey. Declare that that to be the new capital of Iceland. Sell the rest of Iceland to Norway for 100 ISK, a bottle of whiskey and a carton of cigarettes (which is about its actual current value). All the foreign debts get dumped on the new capital, the rest of the former republic of Iceland goes to Norway and Icelanders get Norwegian citizenship and all the benefits that go with it.
I imagine the bankers have already thought of this idea.
RIDICULOUS..This is getting a joke…Icelanders are willing to take any money but the Euro…Willing to take the dollars… willing to take the norvegian krona…but not the Euro..
Bad luck for them… the norvegian krona stays high because of oil…We are at the end of the all-oil-age….At 34 dollars the barrel..what value is gonna have the norvegian krona ?
@Vilhjalm. Hypothetically, assuming that the Icelanders actually wanted political union with Norway (i.e. as one or more municipalities), what’s your feel of the Norwegian response?
Presumably there’s a little more in the deal for Norway then to offset any possible devaluation.
*sorry, I meant fylker/counties, not municipalities. That’s what happens when you skip-read wiki pages.
VILJHAM SAID : “”Norway doesn’t owe Iceland anything, and has no financial or moral obligations to help Iceland. Norway handled its economy responsibly, Iceland handed its economy over to a gang of criminals, with predictably disastrous results. You Icelanders collectively screwed yourselves, you get yourself out of your hole. Your problem is too big for Norway or even all the Scandinavian countries together.
If Norway did give Iceland any money, it would just go to pay off the English and German creditors. Better to just send over a couple of shiploads of oil and food to keep you alive. Besides, any Icelander who wants a job can get one in Norway, maybe it’s cleaning toilets, but that’s better than starving here. “”
WHY SCANDINAVIANS TREAT EACH OTHERS AS DOGS?? DON´T YOU HAVE FEELINGS FOR YOUR ICELANDIC BROTHERS AND SISTERS THAT STARVE IN MISERY AND ARE NOW THE POOREST AND MOST MISERABLE COUNTRY IN EUROPE??
WHY DON´T YOU SHARE YOUR MONEY AND HELP ICELANDIC PEOPLE WHO ARE NOW GETTING INTO MISERY AND HAVE NO JOBS OR NOTHING ? DON´T YOU FEEL SORRY FOR THEM??
I THINK THE WHOLE WORLD SHOULD HELP THIS POOR COUNTRY OF ICELAND, HELP THE PEOPLE WITH FOOD AND MEDICINES AND ALL THAT THINGS… I THINK SCANDINAVIANS SHOULD SHOW MORE SOLIDARITY TO ITS OWN PEOPLE… PLEASE, HAVE SOME COMPASSION FOR THE POOR ICELANDERS!! THE SITUATION IN ICELAND IS PRETTY DRAMATIC RIGHT NOW AND IT IS GETTING WORSE… ICELAND NEEDS MORE INTERNATIONAL HELP!!
MANY PEOPLE HAS NO MONEY TO BUY FOOD OR BUY CLOTHES FOR THE CHILDREN, AND IT IS SO BAD WHEN THE WINTER IS SO COLD. NOW IS JUANUARY AND I HAVE SEEN MANY CHILDREN GOING TO SCHOOL AND THEY DON´T EVEN HAVE SOCKS TO WEAR… AND THEY ARE GETTING SICK BECAUSE OF THE COLD. AND THEY ARE ALSO GOING TO SCHOOLS VERY BAD FEED OR WITH EMPTY STOMACHS AS THEIR FAMILIES HAS NO MONEY TO FEED THEM AND MOST OF THEM HAVE EVEN LOST THEIR HOMES…
I THINK WE SHOULD SHOW SOME MERCY FOR THIS POOR PEOPLE OF ICELAND. I HAVE HEARD THAT IN SPAIN, FRANCE, ITALY, GREECE AND OTHER EU COUNTRIES PEOPLE IS RAISING FUNDS TO HELP ICELANDIC FAMILIES…
LETS SHOW SOME COMPASSION BECAUSE ICELAND IS RUINED AND IN GREAT DEBTS, WITH AN INDUSTRY TOTALLY COLLAPSED AND THOUSANDS OF PEOPLE LOOSING THEIR JOBS AND LOOSING THEIR HOMES… WE NEED TO ORGANIZE INTERNATIONAL AID TO HELP THIS COUNTRY…
@Vilhjalm Antonsen
Good post, I like the fact that you are distinguishing between the ordinary icelanders who are decent people and deserve support and the greedy local elite which screwed up and now apparently hopes that Norway will bail them out.
When Iceland consumed its bubble and seemed to be doing great this elite did not show any interest in Norway but now, all of a sudden it is hoped that Norway will drop at least 10 % of its wealth, just to compensate the enormous debts created by this ‘elite’.
It is just surprising to see to what lenght these people will go only to avoid knocking on the doors of the EU. Apparently they would rather eat grass for the next 20 years than to swallow their pride and aplly for EU membership.
It the nowegian gov would be able to negotiate hard ( I doubt they are able to) they would be able to extract the most incredible concessions from Iceland. Icelandic politicians would be prepared to force their whole population to clean norwegian toilets for the next 20 years if Norway would come to the rescue.
>I HAVE SEEN MANY CHILDREN GOING TO SCHOOL AND THEY DON´T EVEN HAVE SOCKS TO WEAR
Perhaps they have Ugg boots?
@Vilhjalm Antonsen
Good post
@ Niels – I agree with your response.
Vilhjalm Antonsen so now we understand you Norwegian man, not Icelandic at all although this lost in many posts you do.
You post show just how much you have personal dislike of Iceland, like Willem Buiter has for Iceland ( as countryman can you comment on that Niels? ).
Norway and Iceland outside EU for obvious reasons. Icelanders open to EUR, NOK, CHF, any other reasonable managed currency.
EUR problem is political sabre rattle of EU commission that Icelander s can only have EUR if take EU memberstate. That is lie of course, but shows that EU would make life difficult if took.
So why not NOK? I think find that those who know about oil and gas in Norway will like idea. Let us stop pretend nation state, and EU commission, do thing for “good of all” etc etc.
They do it for self interest. Norway sees good thing in Icelandic resources. They not only ones.
http://www.icenews.is/index.php/2009/01/23/oil-exploration-licences-on-sale-in-iceland/
So again, why not NOK? Have more in common with Norwegians than many think.
European Monetary Union is all about political union. So why not apply same idea to monetrary union of Norway and Iceland?
(EMU and Euro sure as hell isn’t an economic union. As such it is ludcrous.)
F*ck Norway, i dont want anything from Norway,
Steingrímur is doing this on his own, no one asked him to, and as you wilhelm point out this a laughable idea.
some settlers came here in 974, since then we have had nothing to do with Norway, Norway has the same meaning to us as Afganistan or some shithole at the end of the world, this nordic bs has run its course, it ends now.
NO BROOMLEY, I WOULD LIKE THAT TO BE TRUE, UGG FOOTWEAR WOULD BE AVAILABLE IN ICELAND NOW FOR SOMETHING LIKE 30.000 ISK. PEOPLE IS BUYING SHOES FOR THEIR CHILDREN ARE RETAIL SALES STORES THAT SELL SHOES FOR 2000 ISK. AND THAT IS IF THEY HAVE MONEY FOR THAT.
AS I HAVE POSTED HERE BEFORE, I HAVE GIVEN AWAY COATS, SHOES AND OTHER WARM CLOTHES TO PEOPLE WHO COULD NOT AFFOR THEM THIS WINTER… I HAVE ALMOST GIVEN HALF OF MY CLOTHES TO ICELANDIC PEOPLE WHO CANNOT AFFORD TO BUY A COAT OR GOOD SHOES FOR THE WINTER.
I HAVE BEEN ALSO COOKING FOR PEOPLE THAT I KNOW HAVE NO MONEY AT ALL TO BUY FOOD. I HAVE BEEN INVITING FRIENDS TO THE CINEMA BECAUSE IT IS SAD TO SEE THAT PEOPLE HERE HAVE NOT EVEN MONEY TO SEE A MOVIE…
SO I AM HERE WITH MY VERY GOOD AND HIGH PAID JOB WHILE MOST OF THE PEOPLE IS UNEMPLOYED AND HAVE HUGE DEBTS, I KNOW YOU WONT BELIEVE ME BUT ROUGHLY 40% OF ICELANDIC STUDENTS AT THE UNIVERSITY HAVE KIDS TO FEED!!!
THIS IS NOT A JOKE, THIS IS SERIOUS!!! PRICES HAVE RISED SO MUCH, AND PEOPLE CAN HARDLY PAY THE RENT, SPECIALLY STUDENTS AT THE UNIVERSITY, WHO ALSO ARE LIVING OF LOANS. FOOD IS MORE EXPENSIVE, EVERYTHING IS MORE EXPENSIVE… HOW ARE THEY SUPPOSED TO FEED THE CHILDREN? HOW? PEOPLE HAVE TO PAY THE DOUBLE FOR THE CAR. AND HOW IS PEOPLE SUPPOSED TO DRIVE THE KIDS TO HE SCHOOL IN THE HARD WINTER WITHOUT A CAR? THEY NEED TO HAVE A CAR ALSO FOR GOING TO WORK AND THE UNIVERSITY. THIS IS ICELAND AND IT IS COLD, AND SNOW AND ICE AND BAD WEATHER!!
EVERYTHING COST THE DOUBLE, AND MOST OF THE YOUNG PEOPLE ARE LOOSING THEIR JOBS… HOW ARE THEY GOING TO SURVIVE?? DON´T YOU GET THAT ICELANDIC PEOPLE IS IN VERY URGENT NEED OF MANY THINGS AND THAT WE NEED TO HELP THEM??
IT DOES NOT MATTER NOW IF THEY WHERE PARTIALLY RESPONSIBLE FOR THEIR OWN MISERY BECAUSE OF THEIR IGNORANCE AND ARROGANCE… WE HAVE ALREADY TOLD THEM AND THEY KNOW NOW. SO IT IS ENOUGH, NO WE HAVE TO THINK OF THEM AS HUMAN BEINGS, AND HUMAN BEINGS MAKE MISTAKES… SO LETS HELP THEM. AND I WOULD FEEL REALLY ASHAMED IF I WAS NORVEGIAN BECAUSE YOU KNOW THIS PEOPLE HAS THE SAME BLOOD IN THEIR VAINS AS YOU HAVE IN YOURS, BECAUSE YOU ARE BROTHERS AND SISTERS… AND THEN YOU SAY YOU ARE NOT GOING TO HELP.
THE IMPORTANT THING HERE ARE NOT THE BANKERS OR POLITICIANS. THE IMPORTANT THING HERE IS THAT LOTS OF INNOCENT PEOPLE IS SUFFERING IN MISERY AND ARE IN REAL NEED, AND THAT IS THE TRUE.
SO THERE ARE HUNDREDS OF ICELANDIC FAMILIES THAT ARE IN REAL NEED OF URGENT HELP RIGHT NOW. THEY NEED FOOD, THEY NEED MEDICATIONS, THEY NEED CLOTHES FOR THE CHILDREN, AND THEY NEED GOD KNOWS WHAT MORE THINGS… MAYBE SCHOOL MATERIAL FOR CHILDREN AND ALL THOSE THINGS… AND OF COURSE, WHAT THEY NEED MORE IS MORAL SUPPORT FROM ALL OF US!! BECAUSE THEY NEED TO KNOW THAT WE ARE WITH THEM…
THIS ARE PEOPLE WITH THEIR STORIES, HUMAN BEINGS JUST LIKE YOU AND ME. YES, THERE IS PEOPLE IN ICELAND THAT IS VERY RICH. BUT THE TRUE IS THAT THE MAJORITY OF PEOPLE IS POOR, AND NOW THAT THEY DON´T HAVE A JOB THEY DONT HAVE MONEY FOR PAYING THE HOUSES AND FEED THE KIDS AND ALL THE THINGS…
LETS SHOW OUR COMPASSION AND CHARITY TO THE POOR PEOPLE OF THE RUINED ICELANDIC NATION….
MAY GOD HAVE MERCY ON THEM
First of all I think that this decision will not be made on the basis of simple private public opinions, this is a political question, which will be handled by politically measures. I think our (Norway’s) finance minister could be positive to let Iceland get a hand on NKr simply because she is against Norwegian EU-membership, and if Iceland joins, then we (Norway) have to adapt to the new reality, which is a harder trade-talks with EU, and in the line probably a membership for ourselves. Norways finance minister (from the political party Sosialistisk venstreparti, 8%) together with another coalition party (Senterpartiet, 6,5%) would/should definitely consider this idea as a countermeasure for a Norwegian EU-membership. But the reality is that this is an election year and this kind of economical muscle work can’t be done before the results are in. If there would be another government coalition, the idea is out of question. But with a government like today it could, if there is enough “camels” to swallow.
The largest coalition party in Norway (Arbeiderpartiet) is pro-EU and have the majority in the government with 32,7%, they would have a lot to say if or not, and this unfortunately does not work in theirs grand scheme on a Norwegian EU-membership. Jonas Gahr Støre (Norways foreign minister, Arbeiderpartiet) was on an official trip to Iceland this fall, where he visited the Icelandic sister party, which now have the PM in Iceland. Here he had probably made sympathetic approaches on answers for Iceland as the EU-membership and Euro. This could be interpreted by the two other coalition parties trip to their sister parties in Iceland, rallying against EU.
I for one would like to see Iceland rise up from the ashes, ones more, if it would be with or without NKr, because it’s clearly that the path of the ISK is bumpy and too long. In the end our faith is entwined with yours in the matter of EEA and EU, and I also think that we sooner or later will be sold in to the EU-system.
P.B FINMARK, WHAT ARE NORWEGIANS DOING NOW, I MEAN THE CITIZENS OF NORWAY, TO HELP THE DESPERATED FAMILIES IN ICELAND???
NOTHING!!!
TOTALLY SHAMELESS!!
@Fisy,
I find it strange that according to you people who give a rational analysis of the rather bleak situation that Iceland is in ‘have a personal dislike towards Iceland.”
You should distinguish between objective analysis and irrational dislike.
I can only speak for myself and I absolutely do not have such a personal dislike. I have been to Iceland once (last nov ) and I liked it very much.
I did not know anything previously about mr Buiter (sorry, I do not know all 16 mill dutch personally) but I must say that he has got an excellent blog on the FT, recommended reading for everybody on this forum who is interested in economic matters, since he writes quite extensively about the world wide economic crisis.
This is a very good example, also with extensive mentioning of iceland. In my opinion this analysis is nothing new and very correct.
http://blogs.ft.com/maverecon/2008/11/how-likely-is-a-sterling-crisis-or-is-london-really-reykjavik-on-thames/
This is another paper from him which I already posted. Interesting to note: already last SUMMER mr. Buiter was able to point out that the situation of the icelandic banks was very dangerous. He was quite right about it wasn’t he? Much more so than his colleage from the London School of economics, Portes.
Even more interesting: as mr. Buiter pointed out he was asked by his icelandic audience (consisting of icelandic economists, also form the national bank and the private banks) to keep the content of this paper confidential: they were NOT interested in the people learning the truth!
http://www.voxeu.org/index.php?q=node/2498
Gus, how long you live in Iceland for?
GUS: This is a very little known reality in Norway, first time I heard about starving families and the hardsship with the mass evictions was yeasterday (ref.: http://www1.nrk.no/nett-tv/indeks/158055 ). I hope you understand that when nobody askes for help and one are not aware about the problem, it’s hard to do contermessurements for it. This is a problem that should be organised by the normal national help aid organisations as Salvation Army, maby Norwegian Church Aid and red cross. They have the structure and means to facilitate such an gras-root effort.
@Gus: if icelanders are so suffering and the children have no socks then why is your nation sending 3000 wool items donated by people to britian?
Come home,icelenders.
We have missed you for over 1000 year.
>I find it strange that according to you people who give a rational analysis of the rather bleak situation that Iceland is in ‘have a personal dislike towards Iceland.”
I refer to Vilhjalm post above:
“You want Norway to hand over $5-10 billion to rescue you? Or what about the banks’ debts of $20-25 billion? You want Norway to pay for that too?
What a joke.”
“Norway handled its economy responsibly, Iceland handed its economy over to a gang of criminals, with predictably disastrous results. You Icelanders collectively screwed yourselves, you get yourself out of your hole.”
“Besides, any Icelander who wants a job can get one in Norway, maybe it’s cleaning toilets, but that’s better than starving here. Or do you want Norway to guarantee you high-paying jobs as webdesigners and interior decorators and bank managers?”
FISY, I HAVE BEEN IN ICELAND ALMOST HALF OF MY LIFE!!
>I did not know anything previously about mr Buiter (sorry, I do not know all 16 mill dutch personally) but I must say that he has got an excellent blog on the FT
Yes Willem Buiter papr in April 2008 pretty good although his paper ignore fact that being in Euro zone not stop opportunism like Brown Darling did to Kaupthing which is a big if part of so called protection of being in Eurozone. i.e. just plain seizing of monies in bank beit GBP or EURO.
Really it is personal appearance on Kastljós last week he came across sneering and I found that strange, but it was this article that makes me wonder if personal bias against whale hunting is behind part of thie sneeringness it show a clear dislike toward Icelandic people:
http://blogs.ft.com/maverecon/2008/05/god-save-the-prince-of-whales/ for example:
“In the meantime, I will follow my wife and make a contribution to the Sea Shepherd Conservation Society. With a bit of luck they will be able to harass whale murderers everywhere to the point that whaling is abandoned and the search for alternative socially productive employment for the unemployed harpoonists can begin.”
Axel say:
>as you wilhelm point out this a laughable idea.
some settlers came here in 974, since then we have had nothing to do with Norway, Norway has the same meaning to us as Afganistan or some shithole at the end of the world
Now this show your pro EU bias mainly. Norway has much links with Iceland, dont be silly Axel.
Virgile said:
>We are at the end of the all-oil-age….At 34 dollars the barrel..what value is gonna have the norvegian krona ?
You dream. OIl and has and petroleum product continue for 100 years or more at least in manufacture of plastics.
OIl and gas supplies become even more important in next 10 years. Price up within 2-5 years maximum.
Peak oil idea nonsense exept for low supply in Saudi Arabia. As post above, links to subject,
http://www.euobserver.com/9/27035
“Oil companies like North Energy and Norwegian energy giant Statoil Hydro believe the Arctic holds as much as 25 percent of the worlds undiscovered oil and gas deposits – as much as the combined reserves of Canada and Saudi Arabia.
Russia’s Gazprom already has approximately 34 trillion cubic metres (113 trillion cubic feet) of gas under development in the Barents Sea and Moscow is claiming territory in the Arctic that contains an estimated 586 billion barrels of oil.”
@Fisy
Thx for the explanation. It is clear from this article that mr. Buiter is strongly opposed to whaling and yes, this might have influenced his views.
It also shows how damaging whaling is for the image of Iceland abroad.
WELL, THEN YOU KNOW NOW AND ALL SCANDINAVIANS SHOULD BE ORGANIZING SOME KIND OF HELP RIGHT NOW BECAUSE THE SITUATION HERE IS GETTING PRETTY SERIOUS FOR MANY FAMILIES AND THEIR LITTLE CHILDREN…
THERE IS A LOT OF PEOPLE IN URGENT NEED IN ICELAND, THE COUNTRY IS TOTALLY, AND I MEAN TOTALLY RUINED!!
THE TRUTH IS THAT EVEN THE FUNDS FOR UNEMPLOYMENT PENSIONS ARE DRYING UP!! IN QUESTION OF 2 OR 3 MONTHS THERE WILL BE NO MONEY FOR PAYING THE PEOPLE. THE OTHER THING IS THAT PEOPLE LOOSING THEIR JOBS HAVE INCREASED AND MORE PEOPLE GET FIRED EVERYDAY!! AT THIS RYTHM NEARLY 30-40% OF THE ICELANDER WORKERS WILL HAVE LOST THEIR JOBS IN THE NEXT TWO MONTHS!!
WHAT IS HAPPENING IN ICELAND IS REALLY DRAMATIC, SPECIALLY WHEN THERE ARE THOUSANDS OF PEOPLE WHO ARE NOT GETTING ANY MONEY AFTER LOOSING THEIR JOBS… MOST OF THEM ARE STUDENTS WITH CHILDREN…
THE PROBLEM IS THAT THEY HAVE NO VOICE AND THAT THE ICELANDIC MEDIA DON´T REPORT ABOUT THOSE OLD PEOPLE AND MEN AND WOMAN AND CHILDREN IN NEED. THEY DON´T WANT TO SHOW WHAT IS REALLLY GOING ON HERE. BUT I CAN TELL THAT MANY PEOPLE HAVE NO FOOD IN THEIR HOMES WHILE I WRITE THIS, AND THEY ALSO HAVE NO MONEY FOR BUYING CLOTHES OR BASIC THINGS FOR THEIR CHILDREN…
MANY ICELANDIC FAMILIES ARE EXPERIENCING SHORTAGE OF BASIC FOOD PRODUCTS. MANY FAMILIES HAVE NO MONEY TO BUY MILK OR BREAD FOR THEIR CHILDREN… AND THIS IS TRUE BECAUSE I HAVE BEEN PROVIDING MYSELF FOOD TO MANY PEOPLE SPECIALLY DURING THE LAST DAYS…
IAM, SOME PEOPLE SEND WOOL CLOTHES TO BRITAIN BECAUSE THEY DID NOT KNOW THAT THIS WAS GOING TO GET SO BAD. AND NOW MANY PEOPLE IN ICELAND IS IN REAL NEED.
@PB
You are right and they wont ask because they still think they are rich or at lest they dont want to accept that we are a poor nation, Icelanders are very proud and its the same proud that has us sitting on top of a trash can, you see this news but just last saturday I went with a friand to a shop called everest to pick up some skies he brought to the shop for fixing, you see he got the skies from a friend the hooks to hook the boots from anothet part and the boots from another part,so he brought them to this shop for them to put the skies togather I was so proud of him cuz its clear he is traying to save money, anyways when we got to the shopp on saturday like at 4, it was like if there were giving money away, full of people buying skies because the weather was going to be very good on sunday, the shop was even going to have it open longer because people were buying like crazy, you see you have to be stupid to do this, this nation is in this situation and we deseve it, and if people want to blame the goberment which are to blame by the way,its ok, but peole get the goberment that they deserve and they wont understand untill they are siting not on top of a trash can but on top of a pile of sh@t.just to let you knoe skies and boots cheeap ones not even the good ones are abuot 100,000 kroners, it is way alot of money. so help them? let them healp themselve!!! they can eat the skies and the boots when they run out of money, fried with salt might be ok. and shoes? they can go to woork with their skiing boots, in every country in the world if there is a crisis, they advise people even on tv to be carefull how to spend, but here they say nothing, as with everything, we think we have the right to everything, so why would anybody denie himself the right to have fun skying? like Icelanders say, as soon as they can speak and as long as they are about to die, “MÁ ÉG EKKI” and thats exactly why we are in this situation now.
@Fisy said
“Gus, how long you live in Iceland ”
@GUS said
“FISY, I HAVE BEEN IN ICELAND ALMOST HALF OF MY LIFE!!”
Approx 3-4 years?
Judging by the nonsense you talk would make you around 7 or 8 years old?
It irritates me to see all this nonsense about other nations being obligated to help Iceland, there is absolutely no reason for any one to do that, we did come from Norway but that was over 1000 years ago, if we go further back in time we end up in Africa, why dont we go to Africa and cry for help, we dont need NKR and we dont want EU,
this crisis started only some 100 days ago and people are giving up already, wtf is that ?
every thing GUS is saying is true but the problems hes talking about are our problems and we will sort them out, it may take 5 years 10 or even 100 years but we will not sell our country as ask for handouts from any one, we have already kicked the government out of parliament, the centralbank will be cleared and reorganised in the next few days,
we are taking care of busyness, all we have to do now is retrieve some of the billions stolen from the banks and chop off a few heads,
time to pick up the axe and go to work.
AXEL Said:
“we dont need NKR and we dont want EU…”, “we will not sell our country as ask for handouts from any one, we have already kicked the government out of parliament, the centralbank will be cleared and reorganised in the next few days,
we are taking care of busyness, all we have to do now is retrieve some of the billions stolen from the banks…”
Just regarding to my previous post. I REST MY CASE.
Axel has just conffirm what I just said.
By the way, do you really really think you kicked the goberment out? OK.
@Easy, Gus
Really a dark picture you are painting…and probably a realistic one too. When the financial system is ruined , it takes some weeks, months, but then the squeeze begins…people losing their job, no money, debts…even those who have a job will have a problem to make ends meet and those who lost their job are in severe trouble.
I can only hope the new gov will make good choices and improve things. I feel bad for the ordinary icelanders.
As far as I know you don’t just “get” the Euro when you ask for it, you have to satisfy a lot of EU demmands in order to get it, and at the moment Iceland does not satisfy these demands because of the economic crisis.
As for why Norway might consider this giving Iceland the NOK, It ought to be enough that a lot of people in Iceland is in a tight spot, and access to the NOK might help. It is called solidarity
@Gus: please stop typing everything in upper-case letters, you might have some valuable points, but reading your posts is just to painfull.
There was a column on the possibility of Iceland adopting the NKr yesterday in the Guardian newspaper.
“Not everyone is thrilled at the prospect of an Icelandic-Norwegian [currency] union, with Oslo-based economists warning that it is unrealistic. Oystein Doerum, chief economist at Norway’s largest bank DnB NOR, told Reuters that the idea sounded “absurd” and would most likely be opposed by Norway’s prime minister, Jens Stoltenberg, and Norway’s central bank.”
That should put an end to the discussion. Sorry Iceland, maybe you should ask the Chinese if you can use their yuan.
That Guardian article:
http://www.guardian.co.uk/business/feedarticle/8340054
Axel wrote:
>we are taking care of busyness, all we have to do now is retrieve some of the billions stolen from the banks
From Brown Darling you mean, from the money they stole and danmage they caused?
Vilhjalm of Norway wrote:
>There was a column on the possibility of Iceland adopting the NKr yesterday in the Guardian newspaper.
Steingúrmur should know better in presenting things as he did but this is one of his less idiot ideas. Monetary union as in pegging first might well work.
http://www.guardian.co.uk/commentisfree/2009/feb/03/iceland-eu-monetary-union
You ignore quote of Norway finance minister instead choose quote of Øystein Dørum at DnB NOR who entitled to he opinion but he is talking opinion of how he thinks those people will react, it is not their words.
Bear in mind that Norway economy is closer to Iceland than EU and eurozone is. When oil and gas found in Dreki area then it make even more sense.
ISK has had issue of so called Dutch disease for long time recently with its strong currency — even if for bad reason –so this aspect less of problem than might think.
Pegging ISK at value close to purching power parity with NOK say for 5 years interesting prospect. Norway politicians accept it on conditions of joint exploitation of Dreki area expect.
That no bad for Iceland either as Norway is leader in exploration and explotation tehcnology for this area:
http://www.icenews.is/index.php/2009/01/23/oil-exploration-licences-on-sale-in-iceland/
It not difficult see what is on Norway minds. Fish too, but oil and gas bigger issue.
>maybe you should ask the Chinese if you can use their yuan.
Yuan is set to become strongest currency of 21st century for reserve currency more than EUR and USD — which both in decline.
But China obviously have much less in common with us than neighbours and although without EU we have free trade agreement negotiations — inside EU can’t do that with foreieign nations — PRC are not yet allowing full convertability of Yuan currency. Until then it would not be possible.
But Yuan will soon enough in coming years enter charts as top 5 reserve currency. USD is going to drop down to position of UK in that leaague table soon enough in 21st years.
Axel wrote:
>we are taking care of busyness, all we have to do now is retrieve some of the billions stolen from the banks
From Brown Darling you mean, from the money they stole and danmage they caused?
@Fisy
Here is another Øystein (nice name) – who has given his thoughts (in Norwegian) – if you understand:
http://www.dn.no/forsiden/article1598877.ece
>From Brown Darling you mean, from the money they stole and danmage they caused?
There was a full run on KE before they were transferred. It took ING months to clear the backlog.
Of course, the counter-argument is that that would not have happened if the UK government hadn’t acted regarding Icesave. At the time, people were pointing to the Mathiesen/Darling transcript as proof that Iceland had *not* said that it would not honour the guarantee, so Darling’s statement (and reaction) was unwarranted.
However, it has since been shown that the Icelandic government really did not intend to honour the EEA guarantee (they believed that it didn’t apply to them), so Darling’s interpretation of that conversation was correct.
Anyway, whichever side you’re on, neither would support your “stole” accusation. Just as neither case absolves Iceland of it’s culpability in creating the situation.
Stop crying Wilbert, no one has ever talked about an Icelandic/Norwegian currency, there is no such thing, what Steingrimur wants is the NKR and it 100% Norwegian, this will not happen,
Jens Stoltenberg is for EU and will try to grease the wheels in that direction,
we will replace the ISK some day but not with the NKR, im starting to see why the Icelandic settlers left Norway.
Fisy, no i dont mean Darling or Brown, we may end up thanking them for freazing LB assets and killing KB and S&F, if they did good by doing that it was purely by accident,
God only knows how this would have ended if this madness would have continued,
R.Chenguiz got 273bn ISK from KB in 2008 only,
most of it went to accounts in Cayman Isl,
Baugur owes LB 1bn GBP and have been askin for this loan to “reorganized” meaning LB should write much of it off and continue supporting Baugur,of course if that would have happened the Icelandic taxpayer would have been picking that up along with everything else,
Baugur has now been put into administration and i think PwC will be running the busynesses for LB
i can write a long list over companies and individuals that have recieved large amounts of money in a questionable way in the last few years
both as loans and as payment for busyness that never did take place or as profit from sale of shares in companys that had controled value,
the next few months will be interresting
What im waiting for now is to see what David does,
i think he will be back in politics and start his own party, if he does he will take a large part of the Independence party with him and probably get 15-20%, this news about Baugur helps him beacuse people now see that he was right about Baugur beeing a rotten apple, if he comes back into politics hes going to have to bring something to the table and he will,
David made the mistake of letting some loose cannons ride around the deck causing massive damage, he has a chance to fix that,
David is a strong caracter, i dont think he will let anyone run him out of politics, he will retire when hes ready to do that himself.
DAVID IS ALREADY RETIRED BY THE ICELANDIC PEOPLE. WE DON’T WANT HIM. THIS IS A DEMOCRATIC COUNTRY AND WE CHOOSE WHO WE WANT TO GOVERN US, AND IF THEY DON’T DO WELL THEIR JOB, AND DON’T WANT TO LISTEN TO US, NOW WE ARE ALWAYS READY TO GO WITH OUR STONES BACK THERE AGAIN, ANYTIME IT IS NEEDED… THEY WERE LUCKY TO RETIRE IN TIME BECAUSE PEOPLE WAS VERY READY TO STONE THE WHOLE PARLIAMENT DOWN IF NECESSARY… THE WHOLE COUNTRY STOOD UP AGAINST THEM…
THE PEOPLE RULES IN THIS COUNTRY.. WE RULE THE COUNTRY.. AND THEY HAVE TO REMEMBER THAT THEY WORK FOR US!!
I am looking forward to an eventual trial about KB between Iceland and the UK. I cannot wait for the juicy details of all these ‘last minute’ transfers from KB being exposed.
That other Norwegian newspaper article quotes a professor / No to EU advocate, who is slightly in favor of a union (but mostly in order to get control of the arctic geographical area and maybe the fisheries), but admits that the cost would be very high.
Another professor says it’s a bad idea. “Norge har overhodet ingen interesse av å hjelpe Island med en slik valutaunion. Dette blir som å svømme med stein rundt foten, sier han.” Norway has no interest in helping Iceland with a currency union and doing so would be like swimming with a stone around your foot.” That’s right Iceland, you’re a stone around the feet.
Icelanders seem to forget that Norway has already committed to give Iceland $2 billion of the IMF package, more than any other country. That’s a lot of money for Norway — its stimulus package to improve its own economy is $2.7 billion.
And do the Icelanders show any gratitude? No. None at all. Icelanders complain about how stingy Norway is and stick out their hands like little children, demanding more, saying how “special” they are and how they deserve money just for being themselves.
And what about the Swedes, who have committed at least $700m to Iceland. Does Iceland give them any thanks? No.
On another subject, Iceland seems to think they can recover a lot of money from the bank thieves and their friends, perhaps billions. I doubt it. It will be very difficult to recover the money. Iceland has a very undeveloped system of laws regarding financial crimes (unlike the USA), so it’s not even clear that what they did were crimes under Icelandic laws, and does not have the resources or ability to prosecute, track down the guilty and collect the money, which is hidden away in offshore Cayman accounts. Perhaps Iceland could get them on tax evasion, and threaten them with jail unless they cough up the money. And what about Tschenguiz, the Candy Brothers etc, who are not Icelanders? Really, Iceland would have to get the English involved in the collection process, in return for which cooperation, the English naturally would take a large piece for themselves.
The problem with the Icelandic bank fraud was that it was a very inefficient method of stealing money. Most of the bank losses of $20-40 billion have gone into thin air, flown to “money heaven” as they say. Gone in interest payments and into the pockets of currency and stock market speculations, especially those who “short-sold” the banks stocks and the ISK. The now bankrupt investment banker house Bear Stearns, for instance, boasted about how they were shorting the entire country of Iceland. The insiders probably only stole a few billion, and many of them are probably bankrupt themselves (Bjorgulfs, JAJ).
@Axel thanks for posting a little abou the Baugur situation – some real news!!
Enough of supebowl articles!!!
@Alex Editor – I am waiting for YOUR article on Baugur situation, I think the subject as much to debate upon.
P.s Alex thanks for writing icenews , HA HA- Sorry my poor attempt at sarcasm!
Axel: Just out of curiosity, why exactly are you “starting to see why the Icelandic settlers left Norway”? Anything to do with recent events? Surely it can’t be because Norway has given Iceland loans of several hundred million Euros over the past few months?
Kristofer, i have lent money to friends and family over the years occasionaly, but i dont expect to be treated like a saint or be constantly hugged or kissed for it, the loans of several hundred mil euros are as you say loans, they will be paid back with interests, Norway has promised to lend some more money in the future and we are gratefull for the support,
lots of crazy and stupid ideas seam to be floating around like we would adopt the NKR in exchange for our fisherys or oil, you would have to be a certified fruitcake to even imagine something as dumb as this, and there are a million reasons for that,
we can sell the Russians our oil rights and access to arctic geographical area and keep all other resocurces, we have always had a very good relationship with Russia.
Wilhjalm
“what about Tschenguiz, the Candy Brothers etc, who are not Icelanders? Really, Iceland would have to get the English involved in the collection process, in return for which cooperation, the English naturally would take a large piece for themselves.”
That is what i think will happen, and of
course they will take a large piece, no one would expect them not to.
“The problem with the Icelandic bank fraud was that it was a very inefficient method of stealing money. Most of the bank losses of $20-40 billion have gone into thin air, flown to “money heaven” as they say. Gone in interest payments and into the pockets of currency and stock market speculations, especially those who “short-sold” the banks stocks and the ISK. The now bankrupt investment banker house Bear Stearns, for instance, boasted about how they were shorting the entire country of Iceland. The insiders probably only stole a few billion, and many of them are probably bankrupt themselves (Bjorgulfs, JAJ).
Im not saying this will be easy, but its the right thing to do, we cant let people get away with this
the money im talking about is mostly the loans made by the banks to busynesses like Baugur and other smaller investers and special “friends” of the banks, some of the people can be prosecuted for tax fraud, some for treason etc, the possibilitys are endless, we can be cold and calculated like the average banker, i would like to see 150-200 people behind bars this year,
Bjorgólfur Thor is trying to sell Actavis for 6bn euros, Actavis owes 5bn euros, he will be lucky if he can walk away from this without loosing,
he is not welcome here in Iceland any more than Jón Ásgeir, i would bet on both of them being bankrupt before the end of the year.
we are in a posision to do more or less what ever we want, we can change laws, nationalise property ,use emergency laws aready in place, write new laws like the British terrorist law,
this is limited only by our imagination and will,
LB has requested an Administrator to be apointed to BG Holding in British courts and Glitnir demands immediate payment of all loans to Baugur and related companys.
And Gus, i aggree with you, i would never wote for David Oddson, but it would stir things up if would come back to politics with his own party,
who knows what David Knows ;)
this could be valuable for us,
what i want is a new system where we wote for a PM and he hires professional people to run the country
whitout ties to political partys or private companys, a simpler and more transparent system,
i like how patriotic you have become Gus,
good to see how important Iceland is to you.
Kristofer Torkildsen: Please read posts above. It is because the political play the Norwegian labor party led by Jens Stoltenberg and Jonas Gahr Støre are doing, or not doing, for giving Norwegian anti-EU organizations one less argument for being outside EU. An EEA-treaty crash is a gift from heaven for the J.S.-duo and fits well in their scheme of an EU-membership in a window of 8-10 years. Støre have already gone to its sister party this fall and among was lobbying for an Icelandic EU-membership. So I think it’s timely for Norwegian EU-parties to do some counteractions, even thou they are sitting in the same government, because they did not start this race.
Correction: So I think it’s timely for Norwegian ANTI-EU-parties…
@ Fishy
Happy new year to you too!
“@Axel thanks for posting a little abou the Baugur situation – some real news!!”
I agree Fishy.
Baugur features in the UK press, and is important to both countries.
Alex??
PS
http://news.scotsman.com/scotland/Baugur-boss-fears-39vultures39-will.4949507.jp
http://www.independent.co.uk/news/business/comment/jeremy-warner/jeremy-warner-baugur-was-always-an-accident-waiting-to-happen-1546422.html
Baugur is trying to put the company into administration here in Iceland and filed for that on wednesday, the court date was supposed to be yesterday but was delayed, tomorow a British court will review LB request to put Baugur into administration, the new court date here is also feb 6th, in Iceland baugur will be allowed to have a assistant with the administrator but in Britain LB will have get that chance,
Jón Ásgeir is saying LB kicked him in the balls
and this is all David Odssons fault, lol
It is estemated(probably info from KB Lux) that the “billioners” have hidden 1500-2000bn Isk in KB lux and Cayman isl,
i dont know if anyone has ever been convicted of treason here in Iceland, but its not unlikely that we will look into possibilitys like that,
Iceland has the oldest parliament in the world and lots of old laws and regulations.
@ Axel
A very interesting BBC Programme relating to Tax Havens was broadcast 2nd Jan. I’m not sure if BBC I-player can be viewed outside UK (I think it may restrict viewing to UK IP addresses)?
It would seem that Obama and other governments have them in their sights – the missing taxes may be becoming more important than the previous cosy relationships between politics & business – or is that wishful thinking!
http://www.bbc.co.uk/iplayer/episode/b00hd3x0/Panorama_Tax_Me_if_You_Can/
Sorry for being off topic everyone.
Sorry
Link not working. Programme was Panorama, broadcast 4th Feb – Title ‘Tax Me If You Can’
The underscores are missing from pasted link -
‘Panorama_Tax_Me_if_You_Can/’
I’ll try again.
http://www.bbc.co.uk/iplayer/episode/b00hd3x0/Panorama_Tax_Me_if_You_Can/
Wierd. It’s changing the x in b00hd3x0 to something similar but different – perhaps a multiplication sign?
Third time lucky? It’s certainly pasted okay:
http://www.bbc.co.uk/iplayer/episode/b00hd3x0/Panorama_Tax_Me_if_You_Can/
That information that bank insiders stole 1000-1500 billion is a bombshell. If true that means of course that Iceland would be able to solve most of its problems and avoid the EU.
Unfortunately there are some problems. The news was reported only by a left-green Althingi member, Atli Einhversson – and where did he get this info from? Only Luxembourg financial authorities have access to KB Lux records now, and they refuse to release that info until Iceland pays for the KB “Icesave” type accounts in Belgium and Lux. So how could an Icelander get this info, not to mention a minor left-green Althingi member?
And then of course there is the problem of finding all the bank thieves and forcing them to release info on the Cayman accounts. An enormously difficult task. Has anyone ever heard of the Caymans handing over accounts and account info? Really, Iceland would have to catch and imprison each of the criminals, and maybe their families too, to get the money back. A few beheadings or public hangings would help too.
One effect is that it will change everyone’s perspective. The left-greens will gain (as patriots trying to actually do something) and Sjalfgraedisflokkur will be completely dead. And support for joining the EU will go down. The average Icelander will refuse to pay tax increase and so on and will turn into Clint Eastwood- Western characters who think only of revenge. The British may no longer be enemies, they become your friends and allies if they help track down the crooks and recover the money
Alas, I think this amount of 1000-1500 is overstated. That is a lot of money and it would be difficult to transfer without anyone noticing. The African and Pakistan leaders were only to steal a few million for themselves, and people knew about it. Most likely the amount stolen by Icelanders is much small than Atli reported.
If you read the newspaper stories, you can see how KB, Baugur etc lost their their money. They lost it by making incredibly stupid deals, with the insiders taking a small portion for themselves.
@Bromley86
Extract from BBC website – “as stated in this guide, the BBC has acquired On-Demand rights to offer television programmes only in Britain and not to anywhere else in the world.”
It would seem that pasting the link into this website with a non UK IP blocks it. Unless Alex has a get-around solution?
Sorry those outside UK
Djísus kræst, the stuation for Iceland just gets worse and worse.
Apparently the debts of Old Kaupthing are 2.430 milljarðar ISK, assets are 620 milljarða ISK (and that is mostly loans due to them). That leaves 1800 that Iceland is suposed to pay. That’s maybe $12 billion. And that’s just Kaupthing debt.
There’s no way to pay that, on top of the Icesave debt and government bond debts and the debts of the other two banks. The money stolen by the bank crooks, if you can get it back, is just spitting in a lake. You Icelanders might as well just give up now. Don’t bother making house or car payments. Pack your suitcases and buy one-way tickets to Denmark or Norway.
Or Iceland can just default on all payments now and see what happens. Better to die quickly on your own feet than starve like a dog for the next 20 years.
@VA. That’s not the way it works, AFAIK.
The Icelandic government is only exposed to paying the EEA guarantee of ~20k euros per depositor. The rules in Iceland mean that depositors are paid first by the banks ahead of any other creditors. So the government is only at risk of paying if total assets (not net assets) are less than deposits and then limited to 20k euros per person.
Do you have a link for those figures? It’d be interesting to see what the situation is.
Vilhjalm
“The money stolen by the bank crooks, if you can get it back, is just spitting in a lake”
thats not the point,
“You Icelanders might as well just give up now”
“buy one-way tickets to Denmark or Norway.”
most people i have talked to who are considering to move are talking about Canada, i think Norway has the upper hand against Danmark, personally i would never move to Denmark, ive been there and was not impressed, i think the best option would be Canada, in Norway we will be second rate citicens, same goes for Denmark, that would be ok if there was a intelligent reason for that,
thats not likely,
At the beginning of this crash GUS enjoyed to talk about us Icelanders in the same way you do, making similar suggestions, since then he has grown as a person, you should do the same,
I was born here and im not leaving.
The central bank asked FME to look into the possibility that KB and Exista who owned a large part of KB had atacked the Kr to make profit from that action in apr 08
the CB said in a letter to FME that if banks where undermining the economy it may lead to national bankrupcy,
FME found that Kaupþing had bought 2 bn euros from november 2007 to march 2008, also that the biggest owner of Kaupþings, Exista, had 30 bn kr profit in 2007
no explanation has been given for that profit.
http://m5.is/?gluggi=frett&id=72996
To Bromley86:
>>>>Do you have a link for those figures? It’d be interesting to see what the situation is.
The new report from skilanefnd Kaupthing can be found at:
http://www.mbl.is/media/22/1222.pdf
There is a lot of new interesting information here, but its important to note that this is not the final report (which is expected to come out by February 15th).
It looks like they are expecting large share 935 ISKbn of the assets (loans to customers) that were transferred to the New Kaupthing will have to be written off. This is probably due to large number of companies and individuals in Iceland going bankrupt and will therefore not be able to pay back their loans.
The bond from New Kaupthing to the Old Kaupthing is listed at 175 ISKbn, but this is still a preliminary number according to the report.
Regarding Old Kaupthing, the assets were estimated at
618 ISKbn, compared to the original 2692 ISKbn. These amounts were originally estimated in November and there are lot of disclamers in the report that these should NOT be considered final amounts. But it seems clear that there will probably be some serious losses on those asset values too. We will just have to wait for the final report to see how much.
You were right when answering VA, the Icelandic government has only commited and is only required to pay the 20K Euros per depositor, according to the EEA deposit guarantee directive. As you probably noticed, the UK and Iceland are still discussing (arguing) on the actual payment terms of the loan from UK to cover those deposit payments. It will be interesting to see how that dispute will be resolved, now that we have the new government.
Bjarni
@ bjarni
Welcome back!
Please if you have time keep posting on this forum.
You before was always on this forum supplying very accurate facts and figures.
You defended Iceland well in a unbiased way.
SO PLEASE , if you have time rejoin us all in the good fight.
thankyou
The losses from the banks are enormous.
- Kaupthing has 1800 billion ISK debts over assets.
- Glitnir has 1400 billion ISK debts over assets (?).
- Baugur has 1 billion pounds debts over assets. This is supposedly the “assets” that Iceland would use to pay back the British for Icesave.
- Robert Tschenguiz was “lent” 107 billion ISK by Kaupthing. He is broke and cannot pay. About 700 million pounds are still owed to Kaupthing
- Hafskip and other big companies, who owe a lot of money to the banks, lost huge amounts last quarter and are probably broke.
Earlier the estimates for the bank debts was estimated to be about 20-22 billion Euros. It now appears the actual amount is even higher. And this amount DOES NOT INCLUDE the Icesave debts, which could be from 3-7 billion pounds, depending on how one interprets the agreement.
Add to that, the depositor debts in Guernsey, Lux, Holland etc.
Some Icelanders think that Iceland only has to pay the Icesave debt and doesn’t have to pay the bank debt, and the foreign creditors from Germany, Britain and Japan etc. will be stuck with the debt. That may be true if Iceland stays out of the EU and does not keep its foreign currency reserves within the EU, where the creditors can get at them. If Iceland does join the EU, Iceland most likely will be responsible for the banks debts. The reason is that the government nationalized the banks and over the past years the banks apparently borrowed money with the Icelandic Central Bank acting as “parental guarantor”. This issue is not clear, but the creditors can make a strong case for this within various courts in Europe, in Britain, Germany etc. If so, the creditors can get judgments and seize any Icelandic government property in Europe, and presumably can get assets in Iceland too, if Iceland is a member of the EU.
Probably also the EU will demand that Iceland settle its debts before entry into the EU (as part of the deficit limitation requirement), which means paying off the banks or giving them bank assets in Iceland (businesses, home mortgages and so on).
It looks like the only way for Iceland to survive is 1) stay out of the EU, refuse to pay bank debt or Icesave debt, partially refuse to pay government bond debts, nationalize the quotas, and hope for help from Scandinavia (since IMF won’t help if Iceland repudiates any debt) and trade with other countries outside the American-EU sphere (eg S. America, Russia); or 2) join the EU, pay off bank debt by either giving creditors all bank assets within Iceland and/or selling off all vailable resources in Iceland controlled by the government (energy resources, houses, etc.), and/or restructure debt into long-term (eg 50 year) instruments backed by the government. and hope for partial debt forgiveness from Germany. Either choice is terrible, the second path is slightly less worse, for the average Icelander, since ownership of assets in Iceland is concentrated among the rich.
@Axel “in Norway we will be second rate citicens” First – it is up to the Icelenders to make their choice. The bad thing is when people feel they have to leave because of the situation in Iceland.
I don´t think you should be afraid of beeing a second rate citizen, wherever people come from. For those who decide to go to Norway and already have a job, I think they will get a relatively smooth start.
There will probably come som comments on this, but I would eventually asked people that have real experience on this. Much also depends where they move to, in fact many places is also probably more like Iceland than Norway.
Norwegians/Norway hope Iceland can get out of the crisis. It is much up to Iceland how they want to manage this and which more help they eventually want to ask for.
http://www.telegraph.co.uk/news/worldnews/europe/iceland/4540835/Iceland-downfall-of-a-foolish-little-nation.html
To Vilhjalm Antonsen:
>>>>The losses from the banks are enormous.
- Kaupthing has 1800 billion ISK debts over assets.
- Glitnir has 1400 billion ISK debts over assets (?).
- Baugur has 1 billion pounds debts over assets.
This is supposedly the “assets” that Iceland would
use to pay back the British for Icesave.
- Robert Tschenguiz was “lent” 107 billion ISK by
Kaupthing. He is broke and cannot pay. About 700
million pounds are still owed to Kaupthing
- Hafskip and other big companies, who owe a lot of
money to the banks, lost huge amounts last quarter
and are probably broke.
When you submit amounts like these, it would be helpful if you also included the actual references from where you got those numbers. Otherwise it is not possible to make any judgements on how well sourced they are and whether they are indeed accurate.
>>>>Earlier the estimates for the bank debts was estimated to be about 20-22 billion Euros. It now appears the actual amount is even higher. And this amount DOES NOT INCLUDE the Icesave debts, which could be from 3-7 billion pounds, depending on how one interprets the agreement.
Add to that, the depositor debts in Guernsey, Lux, Holland etc.
Actually, if you read through the financial reports for the banks at the end Q2, 2008, you will find that the total debt of the 3 old banks was about 53 billion Euros and total deposits were about 34 billion Euros, but of course some parts of these were in Iceland. It has been in the news that German banks alone had loaned Icelandic banks about 21 billion Euros.
Here are the URL’s for each of the banks:
https://www.glitnir.is/english/investor-relations/financial-reports/annual-reports-archive/
http://www.oldlandsbanki.com/reportsandfinancials/
http://www.kaupthing.com/Investors/Archive
We spent a lot time debating and analysing these numbers in previous discussions in November, which you can find here:
http://www.icenews.is/index.php/2008/11/13/icesave-deal-expected-quickly-iceland-foreign-minister/#comments
We can debate endlessly exactly how much the Icelandic population is supposed/required/forced to pay back to foreign banks and depositors. The only amounts the Icelandic government has agreed to so far is the 20K Euros per foreign depositors of IceSave (and some of Kaupthing Edge’s), which will probably come to about 4-6 billion Euros, but even this is not very clear. The main question now being debated is on what terms the loans from UK and Netherlands will be, including what interest will be paid.
Any suggestion that Iceland will have to pay up other parts of debts for the old Icelandic banks (which were private banks) from anything else than their respective recoverable assets, has not been supported yet with any serious legal argument that I have seen.
Even if someone could make the legal argument, that Iceland was supposed to pay some of the other bank debts (above recoverable assets), it will probably be total exercise in futility, anyway. Just to pay back the loans Iceland has taken so far (IMF/IceSave), which are already equal to the GDP of Iceland, will be difficult enough and take many decades at minimum.
If you are already bankrupt, it does not matter if you owe 1 million, 10 million or 1000 millions, you still cannot pay it.
Bjarni
The amounts all come from Icelandic newspaper and blog reports, mostly from the last couple of weeks. You can find the figures on Eyjan.
You quote the figure of about 21 billion Euros for German bank loans to Icelandic banks, so you must admit that that number is roughly the minimum amount that “Iceland”, either the banks or the government, owes to foreign creditors. The amount could be as high as 30+ billion euros.
It doesn’t matter what Iceland thinks it owes. What matters is what the IMF and the EU thinks Iceland owes, since Iceland will either starve to death or become an impoverished North Atlantic Cuba without IMF help and EU membership. Iceland will be forced to agree to whatever the IMF/EU say it owes if Iceland wants to join the EU. Whether Iceland can actually pay is a separate matter.
‘”Any suggestion that Iceland will have to pay up other parts of debts for the old Icelandic banks (which were private banks) from anything else than their respective recoverable assets, has not been supported yet with any serious legal argument that I have seen.”"
I’ve already outlined how that argument works. The Germans and British will maintain that the Icelandic Central bank implicitly or explicitly guaranteed the bank loans. The record of events over the past years show that the Central Bank and the three banks were closely intertwined, with the Central Bank loaning the banks money on favorable terms when they needed or wanted money. Whether there were explicit guarantees is not clear, since the terms of the German loans have not been publicly disclosed, as far I know. The nationalization of the banks further strengthens the arguments of the European creditors, if it really was nationalization (it certainly looks that way to me). As a practical matter, the EU Court is unlikely to allow national, Central Banks to completely escape liability for their country’s banks. This would mean, for instance, that Latvia could just walk away from the many billions it owes to the Swedish Central bank. And what about all the Austrian and German loans to Hungary and other E. European countries?
Even if the Icelandic government is not held liable for the bank debts, the European creditors still get all the assets held by the three banks (assuming that Iceland joins the EU, since individual EU members must honor court judgments of other members, ie the bankruptcy proceedings in Britain). That means they assume all the assets, ie debts of Icelandic companies and individuals to the three banks, and assumption of debt means ownership.
I’ve read the Icelandic legal argument in the Icesave matter. It is amateurish, very weak, if not laughable. There is no way an English or EU Court will come to that conclusion.
“Even if someone could make the legal argument, that Iceland was supposed to pay some of the other bank debts (above recoverable assets), it will probably be total exercise in futility, anyway”
Yes, that’s quite true. But that won’t stop the creditors from trying to collect the money. They will get judgments in every EU country, and maybe even Norway too, so they can seize any Icelandic national assets in that country. That means, for instance, creditors can seize any accounts using the Icelandic banks or the Central Bank, or commodities such as fish.
The only hope is for Iceland to join the EU and hope – pray – that the Germans forgive the debts. Or live like an isolated pirate nation, which recognizes no laws but its own.
There is no such thing as national bankruptcy. As Thorvaldur Gylfasson noted, the Icelandic situation is worse than bankruptcy.
Jon Danielsson’s recent calculation:
VLF (GNP) var i? kringum 1,300 milljarðar kro?na. Heildaropinberar skuldir munu li?klega vera a? bilinu 110-160% af VLF.
= 1400-2100 billion ISK = public debt
And his numbers are very conservative (i.e. understated), probably so that Icelanders won’t give up and throw themselves in the sea out of despair.
Just paying the interest on Icesave, IMF and bonds takes 70% of government’s income.
That’s not going to work.
Here’s another calculation:
Ríkissjodur fyrir hrun ~200 milljadar (mat).
Ríkissjodur eftir hrun ~1.000 milljardar (mat & aætlun) – 150 milljarda halli a fjarlogum ársins 2009.
Rikisbankanir ~7.000 milljardar (groft mat)
IceSave ~700 milljardar (mat midad við upplysingar)
Almenningur ~8.000 milljadar (?)
Fiskveidifyrirtækin ~1.000 milljardar, þar af 900 sem eru þekktir nu þegar (mat).
Joklabref/Samuræjabref ~550 milljardar + 300 milljardar (?), samtals ~850 milljaðar.
Annad ~200 – 300 milljardar.
Samtals skuldir: 19.050 milljardar – skekkjumork 100 milljardar.
—
Einar Már Rithöfundur átti fyrra metið sem var að ég held c.a. 15.000 milljarðar. See also: http://eyjan.is/silfuregils/files/2009/02/getum-vid-borgad.pdf
That’s 19000 billion ISK, without most of the bank debt
Whichever way you calculate it – Íslendingar eru í mjög, mjög stórum vandamálum. Deep deep sh*t.
Good to see you again Bjarni, and thanks for the accounts. Not that they matter regarding Icelandic *government* liabilities – I was being dim as they have no exposure, at least regarding the UK market, to Kaupthing deposits as those were covered by the UK deposit protection scheme. Although I see you mention that they have some liability – perhaps unrelated to KE?
Am I right in thinking, ignoring the rights and wrongs of the bank transfer vs. traditional bankruptcy, that the transfer of positive net assets to the new banks effectively prioritises Icelandic creditors over foreign creditors?
That write-down of Icelandic loans is massive. It’s almost exactly 2/3rds! Assuming that it hasn’t been padded, it’s the single most frightening prediction I’ve seen for the state of the Icelandic economy 6 months from now.
>Am I right in thinking, ignoring the rights and wrongs of the bank transfer vs. traditional bankruptcy, that the transfer of positive net assets to the new banks effectively prioritises Icelandic creditors over foreign creditors?
Ah, I just read the link in your last post and it looks like I was thinking along those lines back in November as well :) .
With such massive write-downs, is that bond a one-off transaction? If, say, two years later the actual recoverability of those loans was 50% rather than 34%, would the extra ISK 225b be paid out to creditors of the old bank?
To Bromley86:
>>>>Good to see you again Bjarni, and thanks for the accounts. Not that they matter regarding Icelandic *government* liabilities – I was being dim as they have no exposure, at least regarding the UK market, to Kaupthing deposits as those were covered by the UK deposit protection scheme. Although I see you mention that they have some liability – perhaps unrelated to KE?
Kaupthing Edge had some branches in other countries that were subsidiaries, which means they were in the same situation as IceSave in the UK.
>>>>Am I right in thinking, ignoring the rights and wrongs of the bank transfer vs. traditional bankruptcy, that the transfer of positive net assets to the new banks effectively prioritises Icelandic creditors over foreign creditors?
In my view, it remains to be seen whether this does indeed prioritises Icelandic creditors over foreign creditors. Basically all assets and liabilities that were in ISK were transferred over to the new banks, since that were the only parts, the Icelandic government had any control over. As we have discussed before, the big question was that since Iceland did not have any foreign currency to cover the foreign creditors, should that mean that automatically it should also shut down almost all banking in Iceland in ISK.
At the moment all the creditors, both Icelandic and foreign are in a holding pattern to see how this all playes out. The ones that did not loose money yet were the depositors. The Icelandic depositors still keep most of their money in the bank, while the foreign depositors have mostly been paid out using loans from their respective governments.
>>>>That write-down of Icelandic loans is massive. It’s almost exactly 2/3rds! Assuming that it hasn’t been padded, it’s the single most frightening prediction I’ve seen for the state of the Icelandic economy 6 months from now.
I agree, these amounts are massive, and actually quite worrying. I think the skilanefndir for the banks might possibly be very conservative in estimating the recovery rate. They might for example be valuing almost any loan where it is not clear it will be paid down to almost zero.
Lets take Baugur, which had large parts of the loan portfolio, now that it has gone into administration, how do you value its potential for paying back its loans? Use current fire-sale prices, or how much they would get 10-15 years from now. Will those companies that Baugur owned, even survive the crisis?
There are also lot of news in Iceland about the bankers and people connected to them starting all kinds of foreign holding companies, stuff them up with loans from the banks to purchase shares in various companies, secured only by those shares. This seems to have been done on massive scale, with very little oversight and regulation by the authorities. In most countries this would be simply illegal.
No one knows today how large share of the total bank loans are these kind (our own Icelandic kind of toxic debt), but it is quite likely that most of those loans will not be recovered.
Bjarni
Iceland float your exchange rate! No recovery is possible until you do this.