If Iceland’s Althingi parliament does not pass the bill confirming the state’s overall responsibility for dealing with the Netherlands and the UK’s Icesave claims, the entire country’s economy would be put on a war footing. Iceland would not receive further loan payments, companies would be unable to finance themselves and fall increasingly into bankruptcy, and the Icelandic nation would find itself no more respected than Cuba and North Korea among the community of nations. This is the opinion of Thorolfur Matthiasson, professor of economics, who says he is very surprised by the “irresponsible attitude” of some politicians on the issue.
Nearly all opposition MPs are against the bill in its current wording and its progress through parliament will rely on the Left Green coalition party convincing all (or nearly all) of its MPs to vote in favour.
Some Left Green MPs have voiced concern over the bill, among them Minister for Health Ogmundur Jonasson. It is thought that the fledgling coalition government as a whole could be doomed if the contract with the British and Dutch is not confirmed in parliament.
“This is a horribly ugly scene appearing here,” Professor Matthiasson told Visir.is. Left Green leader and Minister of Finance, Steingrimur J. Sigfusson has said, for example, that the loans from the Nordic countries and the IMF depend on confirmation of the Icesave deal.
“I really can’t stomach allowing my thoughts to run all the way to their conclusion,” Matthiasson said. “That’s why I’m so surprised at the irresponsible attitude politicians are showing.”
“One can see that Icelanders don’t have any good options to choose in this situation, but the option to reject the deal would probably be less good because of the consequences which would likely come with it,” said Olafur Isleifsson, an economist with the University of Reykjavik.
“On the other hand, it is up to the government to outline more clearly the pressure being put on the Icelanders and what exactly the consequences would be if Althingi refuses to pass the bill. It is not good to experience how isolated and friendless Iceland could become in the world in this way.”
Steingrimur J. Sigfusson said that it is likely a majority of Althingi will support the deal. The bill will probably not come up for debate before the weekend though.
Sigfusson urged fellow MPs to base their decisions solely on the evidence and arguments put before them in Althingi and not to vote on sentiment or speculation.
“I trust that people will come to see that this is the comparatively best way we have out of this situation. This option is the lesser of two evils and I have full confidence that MPs will support it.”
Spot on! Although it’d be nice if these economists could outline the consequences as well.
Are Althingi sessions open? If so, I suppose we’ll get a summary after the discussion.
Interesting how Olafur Isleifsson does not point out how Iceland will lose their resources and independence by signing, I wonder how big his cut is?
I think Iceland has no other option than to pay for Icesave. I am foreigner, living and working in Iceland and of course it is not fare that we…people living and working here should pay for the mess done by some greedy (“clever”) and irresponsible guys. But you know…sometimes life is unfair and we have to deal with that. In my opinion if the agreement is not accepted…then Iceland will be isolated…nobody will trust and do business here…and after a more or less short while…Iceland simply “sinks”. And this means…end of story. If this happens then…whom of us care whether Iceland keeps its resources and independence? We are living in an open world…everything is interconnected, e.g. economically, socially and so on. That is why I am in favor with the agreement even though I do not like it…but probably it is the less evil you can pick up from the table. God helps us!
I dont see what the deal is that the “world” separates them self from Iceland, is that important to keep the alliance? I dont agree that my self , my kids and maybe my grand childs will have to pay for the mistake of few that are running around living the grand life with their children and grand children.
” But you know…sometimes life is unfair and we have to deal with that”
If their is no signing i must say the same thing , is unfair one way or the other and some times is better to take action and step up to the plate than slave your self ’s for generations in exchange of nothing only to satisfy few pockets and have a fictional peace of mind or ego ( ” yeah, we Icelanders pay our deb’st” ) SURE!! .
Samfylgingin is just to sell its soul and the soul of their grandma to enter EU, I still don’t understand what kind of personal interest they have there but that how it is and this professor is ready to bull**** about the consequences of no to this agreement just as our politician and “scientists” were bull****ting about the consequences of a french no to the eu constitution.
Compare the situation of iceland to the case of North Corea or Cuba, really, I just find that funny and pathetic. When the governants want to have something they are ready to use quite many mean as propaganda and threats, it is not about explaining it is just statements based on nothing, the more the better even though each of them are vacuum, the population of Iceland needs to be “educated” that what we say nowadays for brainwashed.
Icelanders, as an INDEPENDANT NATION, have the right and many good reasons to refuse this agreement. I’m a foreigner living in Iceland, from an eu country, and I will support them in their fight.
The choice is between short-term extreme pain (following a rejection of the bill) or long-term gentle pain (repaying the debt that Landsbanki’s assets didn’t cover and the interest). So, it’s obvious what is better in the short-term (ie within a government’s horizon), but no so obvious what is better in the long term. I suspect that an informed decision could be made only after all the creditor claims against Landsbanki have been processed and so the politicians know the actual shortfall in the deposit guarantee scheme that the state will have to pay. In the absence of this information, parliament should have postponed the bill ratification. My bet is that some of the politicans that vote for this bill will, in a few months time, excuse their vote with something along the lines of “If only I knew then how much the state would eventually have to pay, I wouldn’t have voted for it.”
Concerning Vinstri Græni, I’m not sure in what mess they are putting themselves in, but they for sure betray the program and positions they were standing for before the last elections. It seems that power does change people.
No matter what we want or do Iceland is doomed for misery, if we dont accept the deal we’ll eat sh@t in couple of months, If we accept the deal we’ll eat sh@t in a couple of years maybe even the same couple of months, so, choose your poisson!! People thought brand new cars and houses and trips abroad were falling from the sky, well, NO!! now we have to pay it, its that simple, one way or another we will have to pay it, this things dont grow in trees and peole should have known it, the money came from somewere and it will have to go back there, it was not magic. Sorry.
You can count on my family too :-)
PS. I see no sense to comment bullsh*it about Cuba/North Korea.
But I would remind komrad Matthiasson that if Althingi rejects the deal – it’s called DEMOCRACY and it means that Icelanders are ready to fight. And he can stick his head in his books for good.
According to Bloomberg today: “Four of the Left Green’s 14 lawmakers said in interviews they are skeptical about the accord. The chairman of the opposition Independence Party Bjarni Benediktsson said all 16 in his party would block the bill, while Sigmundur David Gunnlaugsson, leader of the opposition Progressive Party, said all nine members of his party were opposed. Birgitta Jonsdottir, a spokeswoman for the opposition Citizen’s Movement said none of the four members of her party would back the bill.”
>>>>the Icelandic nation would find itself no more respected than Cuba and North Korea among the community of nations.
I think some people back home seem to be getting a little bit ahead of themselves talking about declarations of war and comparing us with Cuba and North Korea. This kind of headline grabbing rhetoric doesn’t help anything.
As far as I know, Iceland has never killed anyone and just doesn’t have the gene for wars. This debate is only about money, alhtough a lot of it.
To Jim:
>>>>According to Bloomberg today: “Four of the Left Green’s 14 lawmakers said in interviews they are skeptical about the accord. The chairman of the opposition Independence Party Bjarni Benediktsson said all 16 in his party would block the bill, while Sigmundur David Gunnlaugsson, leader of the opposition Progressive Party, said all nine members of his party were opposed. Birgitta Jonsdottir, a spokeswoman for the opposition Citizen’s Movement said none of the four members of her party would back the bill.”
Just to add for those that don’t know, there are only 63 MP’s in the Icelandic parliament “Althingi”, so it looks like this will go right down to the wire.
I say, lets send the deal to hell, and hold our breaths and fight back. Anyways if we(I say we as if we had a vote, unfortunatelly no) accept the deal we are scrued, so if we dont accept it we have nothing to lose, but you’ll see they will accept it because its not a decition for Iceland to make anymore.
“If Iceland’s Althingi parliament does not pass the bill confirming the state’s overall responsibility for dealing with the Netherlands and the UK’s Icesave claims, the entire country’s economy would be put on a war footing. Iceland would not receive further loan payments, companies would be unable to finance themselves and fall increasingly into bankruptcy, and the Icelandic nation would find itself no more respected than Cuba and North Korea among the community of nations.”
Dear Þórólfur – this has already happened despite our showing of good faith.
What have we to lose by rejecting and insisting on a third party to set the terms of repayment of this loan ?
Answer: Nothing.
Regard,
– Fisy
P.S. Please let us know exactly how much of you grant monies comes from the EU grants.
P. P.S. http://www.icenews.is/index.php/2009/06/21/protests-in-iceland/comment-page-2/#comment-83146
Easy said
“I say, lets send the deal to hell, and hold our breaths and fight back”
Yeah !!, someone once said, its better to be a Lion for a day than a lamb for a lifetime,
“Anyways if we(I say we as if we had a vote, unfortunatelly no) accept the deal we are scrued”
If this goes trough parliament its worthless unless its signed by the president, all we have to do is mount pressure on him until he gives in and sends this to a nation wide vote, witch he can,
then the decision is ours, if this will be close he will be forced to ask the nation.
“so if we dont accept it we have nothing to lose,”
as i see it we have nothing to loose and everything to win,
i have noticed a change in people since the bubble burst, its like people were brainwashed by all the material things we believed we needed, we were constantly fed commercial information from TV, magazines, internet, phones, billboards etc
while Iceland is under siege as it has been for quite a while now the effects of this brainwash have worn off and people are actually able to realize what is important to them, its like the whole nation was wrapped in plastic, unable to think or move.
3 books have been written about the bank crash, two of them have been printed at least twice and the third came out today, this shows the thirst people have to find the truth.
what will happen next if we accept the deal,
IMF will inflate a brand new bubble and the whole mess starts over again, there will be a change of ownership for the natural resources and other assets that can be leveraged or exploited to feed this madness, this can go on until nothing is left,
Bjarni said “This debate is only about money, alhtough a lot of it.”
Its more than that,
Rozwadowski has been spending a lot of time at the office of óbyggðanefnd, it has to do with state owned land like the highland,
http://pressan.is/Kaffistofan/Lesakaffistofu/landstjorinn-ahugasamur-um-obyggdanefnd
Már Guðmundsson is the new central bank gov, he is also the man that successfully created our failed monetary policy, he comes from Bank of international settlements in Switzerland
http://www.bis.org/
“declarations of war and comparing us with Cuba and North Korea” Those to countries are not at war either, well technically N. Korea is at war with the United Nations, but they have a cease fire.
He is probably thinking economic terms, the two countries are isolated in the financial sea.
Ending up like those 2, means the end of the world as you know it.
What is this news? 110% bull****! Comparing Iceland with North Korea and Cuba? Is the professor out of his mind? What we are about to experience here is a democratic way for the nation to chose its future and stand up to the challenge , what the future might bring in a bid shape their future by their own hands and not by the roadmap Brown has in the menu. So please do not compare democratic exercise with a communist Cuba or totally insane aristocratic North Korea. Does the professor have any idea, apart from economics, about the world?
As a foreigner, and to be fair, I don’t really understand why this debate is taking place at the first place. Does Iceland has the legal obligation to pay back the ICESAVE deposits? If yes, they should have the guts to pay, face the challenge, save their faces, work hard, and rebuild the country. If not, damn the agreement. Damn what Brown or the so called neighbours say. Friends and neighbours are there to help you out of trouble. And enforcing the ‘terrorism law’ was not a friendly act by any means.
It is not about keeping or losing friends. It is about the right and the wrong. Let an independent international court decide it. Take it to the court and be ready to face the challenge. This way you can save your dignity and show the world you, as an independent nation, will do what is right, irrespective of what Mr Brown or the so called friends think.
P:S: By the way, where was the wise professor in economics at the time when the banks were doing all sorts of nasty business? Did he not see it ? If not, he is not worth it. If yes, he better shut up!
To Alexander:
You seem to have a vast knowledge of all kinds of issues, both terrestrial and heavenly, and I’m sure you would make a great service to your own country if you went back there and adviced the government there on democratic values and so on. Many of those places your country is placing so much (violent) pressure on would really appreciate your effort. Leave Icelanders and their problems alone, please. We don’t need your tips, thanks.
“We Pay? No Way: Icelanders Turn Up Heat”:
http://news.sky.com/skynews/Home/Business/Icelands-Parliament-And-Citizens-Unhappy-About-Receving-Loan-Proposals-From-UK-And-The-Netherlands/Article/200906415320701
Thanks for soviet*, Esslin, but first tell me how many “WE” you represent? If none – then say “I don’t need”. I have no problem with the fact you – personally – don’t need my tip.
And yes – I have some knowledge. Thanks for noticing that ;-)
*soviet (rus) – advice, tip.
PS. can’t promise to leave you alone. As long as I pay taxes here – I’ll keep bothering you ;-)
It might be interesting to research who was involved in the Icelandic banking system (specifically, foreign individuals and financial institutions – when they became involved, to what extent they were involved, and when they exited). I suspect that you’ll find that the “Icelandic” banking disaster was largely one of foreign making – with figure-head Icelanders pretending to run things.
Even if Iceland does sign the agreement, that won’t stop all these other creditors (not included in Icesave) from suing Iceland. They will get judgments against Iceland in their local courts, Britain, Holland, Germany, wherever, and then take the claims to whatever countries in Europe where Iceland has property. They could even argue that any Icelandic business where the government owns a majority share is gubment property and try to seize their assets. Fish landing in England or Denmark, whatever.
The international community intends to carve up Iceland like a chicken and carry off anything of value like vultures feeding on a carcass. That story about the IMF representative poking around in the Land Office is strange, but believable. Probably they are mapping out areas with undeveloped geothermal energy to give to the foreign creditors. Or maybe they want a bombing range or toxic waste dump.
The Icesave agreement doesn’t help much, maybe it keeps alive the slim chances of joining the EU and stops the British navy from seizing icelandic trawlers once they get beyond the 200 mile limit. Maybe Iceland should do all their business through Japan or Greenland. Or the Russian Mafia.
Vilhjalm, this is also what im thinking,
this is a complicated issue, so many problems attached to any possible move, one could think this whole thing was planned years ago,
at least we now know that replacing politicians and goberments only slows down the process.
Esslin, Speak for yourself, being born in Iceland, if thats the case does not make you superior to any one, we are all on the same boat here.
to AC:
Yes by all means let’s blame foreigners. Because it is clear that no Icelandic person profited from anything that has happened. Passing the blame – you can even make it an upcoming Icelandic tradition if you would like.
If you are interested in passing the blame I recommend that you do the research that you would find so “interesting.” If you find something, then bring that information back to the boards. I bet Alex would love to get a story out based on factual information you uncover. Until then crawl back under the bridge.
personally i think the ice deal sucks we know foreigners were involved in some of the dodgy dealings to what extent i do not think the average icelander has any real idea i also think our goverment is so fixed on joining the EU that it will do nearly anything to keep the EU happy but i have doubts that once it goes to a referadum that the icelandic ppl will accept it i go to uni in UK and it seems to me that the UK has lost it identy something like 25 per cent of the ppl can not speak english the UK goverment has no power any more it mainly rubber stamps EU laws even deporting ppl from the UK is held up as it infringes there human rights
I did forget to mention in my early post. The Icesave deal is complete trash. Please don’t pass something that binds generations to a poorly thought out “quick fix”. Pay what you must in accordance with clearly written EEA agreements and let the courts decide the rest. Don’t just bend over in the hopes that it will improve EU joining possibilities. And then hope the EU will lighten the burden if you join. It won’t happen.
“I suspect that you’ll find that the “Icelandic” banking disaster was largely one of foreign making”
Indeed. If the foreigners hadn’t deposited their savings in Iceland, then there wouldn’t now be the problem of them wanting it back. I blame those foreign depositors too! LOL…
That’s the main point – a complicated issue! And Icesave matter is only a small part of it. And investigation hasn’t started yet etc.
But anyway “new government” wants to push this isolated deal through as soon as possible. I see only one reason for such a hurry – there is immediate personal gain for few persons behind the deal.
10 DOWNING STREET
LONDON SW1A 2AA
23 June 2009
Dear Prime Minister
I am delighted that our great countries have reached an agreement regarding the sensitive ICESAVE dispute. However, it has been brought to my attention that conformation from the Icelandic Parliament has not been assured.
Let me make it clear that should the Icelandic parliament reject our agreement, such a humiliation would not be easily tolerated by Great Britain. I am sure you understand that we consider parliamentary support only as a formality in diplomatic relations between countries.
Should the Icelandic Parliament reject the agreement I ensure you that there will be no further negotiations. You must understand that my government can not appear weak when dealing with a country of only 300,000 citizens. We will therefore be obliged to use our influence within the European Union as well as the International Monetary Fund to slow down any aid or development. This might result in cancelling loans and postponing the Icelandic application for EU membership. More serious consequences would follow with gradual isolation of Iceland from the international community.
It will eventually be realized that the Icelandic parliament will have no other options than to confirm this agreement but the time wasted until conformation is indeed unfortunate.
I am deeply sorry for sharing such unpleasant concerns, but I wish you to be fully informed on the vital importance of having our differences solved quickly and easily, so I hope you are able to influence your respected members of parliament. Only if necessary, you may share the contents of my letter to relevant parliament members on a confidential basis.
Let me at last ensure you that it is the full intention of Great Britain to maintain the strong friendship between the two nations. We will certainly acknowledge special interests of Iceland regarding its application for membership in the European Union.
I believe that our two countries will become even stronger allies in the future as we sail through these difficult times.
Yours sincerely,
Gordon Brown
(sign)
Hi Vilhjalm Antonsen,
I have searched the web for any evidence of the letter from Gordon Brown you posted here without any results.
Did you write this letter putting yourself in the shoes of Brown to explain to IceNews readers how you believe he and the UK government would react to an Icelandic ‘no’ vote?
Or if the letter is real, could you give more information about where you found it?
Thanks for reading IceNews and for contributing such an interesting comment!
Alex, editor
@Alex. Although good, the letter isn’t real. He’s used “ensure” instead of “assure” (that’s not a snipe at his English skills – I wrote “illistrates” earlier today :) ).
The government has decided to make public 68 documents regarding the IceSave deal, 24 doucuments will remain confidential,
the document Vilhjalm posts above is most likely one of the 24, the rest will probably leak out in the next days :)
this is even worse than i expected, what a rotten piece of s*** Brown is, god help the Brits having this fre*k running the country.
DV has gotten a hold of the entire loan portfolio of KB, this will be milked to the last drop over the next weeks, it will be interesting to read.
Bromley is probably right, hard to believe there could be a spelling error in a letter like this.
Someone posted it at Eyjan.
It must be a hoax and fake – but it’s a good one, don’t you think?
The following statement sounds unlikely in public from the mouth of a PM:
“You must understand that my government can not appear weak when dealing with a country of only 300,000 citizens.”
Yes, “ensure” is used instead of “assure”, but politicians are not necessarily literate and maybe an aide made the mistake. Also, Brown is a Scotsman, and the Scots take all manner of remarkable liberties with the English language.
The “letter” is an obvious spoof
But such is the level of empirical grandiose arrogance of Gordon Brown that I suppose I am not surprised that some might be taken in by it.
Should Gordon write a letter, how would he spell “realize”?
I doubt the “letter” was even written by English speaking person ;-)
Not saying that it’s fake.
Well,I say good luck to Iceland and reject the Icesave deal. However, what about the consequences?
Will that make the debts disappear, now, the next decade or next century? Nope. They will still go accruing interest, to be paid back. Eventually.
In the meantime Iceland will be kicked out of the EFTA. Membership means accepting EU Law (No discussion on that. Note the lack of legal recourse by Iceland – it has none. EU acts as judge and jury). Iceland can not pick and choose which part of the EU law it likes and ignore the rest.
Exclusion from the EU will result in Icelanders working in the EU will have to return home to un-employment in their home country.
You want to sell goods to the largest economic block in the world? sure, but you own the EU, so we will add duty to your exports. How about 100% on Fish, Aluminium and everything else?
Forget your banks ever operating outside their homeland.
Want a loan? Pay in Euros or Dollars and look forward to 10% premium for decades to come (the complaints about the interest rate from the Icesave loan is interesting. Iceland’s insurance on top its borrowing rate is around 8%. Anything less is a bargain).
Would the US deal with Iceland? Maybe. But their opinion would unlike to be swayed by a nation that ran up debts of $60billion and refuse to honer their obligations to US’s major ally.
The comparison with Cuba or N.Koran is valid form the point that Iceland will require client support from China or Russia as its sole trading partner to survive. Russia have already laughed at the idea, Norway maybe the only option.
Do the Norwegians have a shortage of fish and aluminium?
It is strange that this Brown letter appears on the same day as other – real – confidential correspondence was given to the newspapers, for instance, a letter between Svavar Gests and an English negotiator named Gary Roberts.
“Bréf þeirra Svavars og Roberts eru meðal fjölmargra gagna sem trúnaði var létt af í gær.”"
http://mbl.is/mm/frettir/innlent/2009/07/01/bretar_syndu_horku_thar_til_yfir_lauk_i_vidraedunum/
I would think that the English would be irritated by the release of such confidential memos, but maybe the English don’t care. It’s like a fly on the belly of a pig, so what. Or like someone wiping their nose on their shirt sleeve, without any embarrassment at all.
Gordon Brown recently printed a trillion or so British pounds, without any shame whatsoever, so why would he care what Iceland thinks about anything?
(Also, in that memo, conformation is spelled wrong, and assured is used in the first sentence instead of ensure, and vice versa later on. Maybe an aide wrote that?)
>But such is the level of empirical grandiose arrogance of Gordon Brown that I suppose I am not surprised that some might be taken in by it.
Like flying saucers and ghosts – perhaps it more demonstrates that some people will be inclined towards what they wish to believe, rather than what is reality.
The letter may be fake but it certainly matches Brown’s attitude accurately.
His actions speak louder than his words. But if his actions were words it would read something like that.
Peter – London at it again :
>Will that make the debts disappear, now, the next decade or next century? >Nope. They will still go accruing interest, to be paid back. Eventually.
I think it is clear many do not dispute the liaiblity just terms of paying it back ( for example time period and interest rate ) as the current deal is no deal at all ( at least not for Iceland tax payer ) and who decides on those terms.
In front of an impartial court or arbitrator EU commissoin might get nasty surprise though.
>In the meantime Iceland will be kicked out of the EFTA. Membership means >accepting EU Law (No discussion on that. Note the lack of legal recourse by
>Iceland – it has none. EU acts as judge and jury).
Nonsense. It is the EFTA Court that has jurisdiction over this but it would need to deal with EU Commission also. And EU commission not want to to touch this.
No one reasonable can possibly have problem with this going to impartial court. Which tells you that EU commission is worried about it.
>Iceland can not pick and
>choose which part of the EU law it likes and ignore the rest.
It does exactly that because of EFTA membership but once it has taken that laws ( which it has for fianance ) then it must abide by them which include 94/19/EEC.
But as Bjarni point out there are major conflicting clauses in this directive regarding repayment terms.
You really should read it before you spout off you misleading nonsenses again:
http://www.icenews.is/index.php/2009/06/16/where-have-all-the-billionaires-gone/comment-page-1/#comment-82056
http://www.icenews.is/index.php/2009/06/21/protests-in-iceland/#comment-82569
If that were the case, presumably the bare minimum should be 4% as that’s what it’s costing the UK to borrow the funds to loan to Iceland. And that ignores any risk premium.
There’s no need for an arbitrator. Secure better terms elsewhere if you want to, otherwise the rate is determined by what the two parties can settle on. The interesting point is that the Netherlands rate is the same, despite their borrowing costs (presumably) being lower than the UK’s. Doesn’t that mean that the British are being more gentlemanly than the Dutch? :D
You keep talking about impartial courts, but that is presumably because you want a ruling on how much (if anything) Iceland should be liable for regarding the initial guarantee liability.
Fishy
The EU has a fundamental principle that Domestic and EU members must be treated the same. By protecting Icelandic depositors 100% the same principle has to be applied to EU depositors.
This is an overriding principle and it the reason that the EU instructed Iceland to pay up. The previous and current government both agreed. No trip to any ‘independent court’ has even been suggested.
For some reason the idea of closing all the banks and wiping out domestic depositors was unacceptable but perfectly ok for EU depositors. All it requires is the belief that Icelanders are special and should be treated differently.
Fisy:
Where do you decide the rate and payment terms in this situation? has the government explained how the figure was calculated? As Bromley86 pointed out, its little more than the UK is paying to borrow the money (and that figure may well rocket in the near future). Interest rates for Iceland have been high for some time, current insurance rates for lending to Iceland are 8-9% per year. 5.5% is a rate more compatible with a stable world economy in a period of economic growth. Pretty generous.
Fisy
“Nonsense. It is the EFTA Court that has jurisdiction over this but it would need to deal with EU Commission also. And EU commission not want to to touch this.
No one reasonable can possibly have problem with this going to impartial court. Which tells you that EU commission is worried about it”
Confirming my understanding of the situation, Icelands complete legal recourse has been expelled-
http://newsfrettir.com/politics/general/1025-arni-was-on-the-defence-
Legal binding arbitration was sought and given in Nov 2008. Apparently after agreeing to it, Mathiesen decide he didn’t understand the words ‘Legally binding’. It means that the decision is final. No more discussion at all.
” as the current deal is no deal at all ( at least not for Iceland tax payer ) and who decides on those terms.”
As well as looking reasonable form my perspective, it was checked by a international law firm
http://newsfrettir.com/politics/general/1029-the-terms-are-comparable-with-what-is-customary-in-the-internationally
Its basically done and dusted. The parliament could reject this deal, renegotiate some more, get better/worse terms but eventually it will be a choice between paying or becoming a pariah state – as the professor says.
Peter – The interest rate on these 2 particular loans shouldn’t have been calculated – it should have been negotiated. These are special-case loans where the lenders’ goals should not be to make a profit based on the risk of default. In this case, there should not be a risk premium. And I bet that not a single British person (politician or the public) would have complained if the negotiated interest rate had been, for example, 4% instead of 5.5%.
Jim:
The interest rate on these 2 particular loans shouldn’t have been calculated – it should have been negotiated. …And I bet that not a single British person (politician or the public) would have complained if the negotiated interest rate had been, for example, 4% instead of 5.5%.”
They were negotiated and if the deal if rejected they will be again, for better or worst.
British people will ****ing complain as hospitals, public services get cut off over the next decades as they will be. UK is getting big tax rises to pay for our debts of over 100% GDP.
You think that little old Iceland should be given free money because there is so many British taxpayers? Well, being generous to foreign debtors wins nobody an election, I can guarantee that.
Icesave was an investment, one with a high interest rate, thereby default a risky investment. I say tough sh*t. It was a private company with private debts. The Icelandic Gov should have only minuimal responsilbility. If you want all your money back, then go after the ones you gave it to (and who have it!), not the Icelandic public who are struggling as well. There is no way that my 1 year old daughter should pay back their investments. Afterall, no one is paying back the investments I made (and lost) and I don’t expect them to. Next time bury it or put it under your matress.
I am 100% with Fisy!! We know that there is fundamentaly speaking NOTHING (repeat nothing) wrong in Iceland . We are decsended from Vikings. That makes us bold and adventerous, not like stay-at-home mamas boys. Are you jealous because we almost conquered your banks and your money? Is Eva Joly sent by the EU gravy train to steal our banking know-how? Yes.
And I say Double Yes to Mike in Iceland! Mike (not Icelandic name, suspicious) but he is 1,000% right! Icesave is private debt! We owe ZERO. Repaet, ZERO. Right. Zero. So go after the bankers. No way we will pay even 1 Euro. Afram Island!
Fishy you are right again 1,000%. NO to Iceslave! We Icelanders always pay our debts. But WE will be the ones to decide what our debts is. (Through a third party picked by us, yes.) We cannot let the corrupt EU/IMF/banker cabal force us into slavery. We pay what we want to pay. And when we want to pay it. Take it or leave it. Or do you want to see our daughters in prostitution? No! we are not French.
We have been through much worse and we always come out on top. Volcanos, eartyhquakes, plagues and floods, polish immigrants. We survived it all. And don’t
forget we lost more fishermen in WW2 than anybody els’es army. And where’s the thank-you from Brown? And from Eva Joly? Afram Island !
Corrupt? Who’s corrupt? Fisy, you are right again, 100,000%. Iceland is not corrupt. Fraud? What fraud? Define fraud. No fraud, just discrepances and bad luck it can happen to anyone. We are 1,000% transparent and the best place in the world to do business. The EU is the ones who are corrupt, they want to colonize us. But it wont happen here. You do not know who you are dealing with. But trust me, the krona will be 10 to the euro and 5 to the dollar, believe it. But for now we say, NO to Iceslave! NO to EU, NO to IMF, NO to Surrender! Listen to Fissy and Mike. Invest in krona and win!
Áfram Island !
Gummi
Welcome back Gummi bear.
I do enjoy you satires. But really I bet you are a foreigner because as everyone knows Icelander have no sense of humour.
Wait… I now know who you are !!
You are Gordon Brown getting his revenge on the evil Icelandic author of the letter above. Wait I have contradicted myself.
Now my credibility is broken. Oh, tears.
Just in case any reading has missed actual agruments and facts during this fun and games, here are the acceptance /renegotiate scenarios presented with some careful considering by Bjarni:
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/comment-page-1/#comment-83787
Peter – London :
>Confirming my understanding of the situation, Icelands complete legal recourse
>has been expelled-
>http://newsfrettir.com/politics/general/1025-arni-was-on-the-defence-
>Legal binding arbitration was sought and given in Nov 2008. Apparently after >agreeing to it, Mathiesen decide he didn’t understand the words ‘Legally >binding’. It means that the decision is final. No more discussion at all.
You will note that I keep on using term “impartial judge”, “impartial 3rd party” etc. It is impartial that is main thing — ie not involved with interest in case.
Basic tenent of justice is “no man may judge his own case”.
There is no way you can accuse those that is appointed in that list as impartial. It was clearly an attempt at what Americans call a kangeroo court.
( Charlie McCreedy being he usual straigh fordward self was warneding in his own way that it was such a kangeroo court. And as said certain memberstate not want him to look at this as I explain before http://www.icenews.is/index.php/2009/04/15/dutch-savers-demand-answers-from-iceland/#comment-72438 )
EU exposes itself more and more in this case as bully. I am surprised they are so bad at the public relations that they do it this way. But then they have a lot to lose in some impartial judge ruling on the case due to complication it make over whole issue of 100% deposit insurances as started by Ireland.
The EU commission career burecrats been doing this kind of thing for so long that they dont know any better. ( Not to Iceland because thank gods we are not in EU — but first to country like Portugal and more recenetly to other memberstate from new Eastern Europe )
Also it is clear despite what Percy say that of course the IMF loan was blocked until this was forced through. But that is obvious to all. This is just confirmation of the bullying that went on.
>As well as looking reasonable form my perspective, it was checked by a international law firm
Here is the documents all released that this is all taken from :
http://www.island.is/media/frettir/icesace_fylgiskjol_I.pdf
It is long — but very interesting — read. And certainly Brumley and Niels will find it interesting given source fact it contains and point to.
It may even challange some of your ideas.
>The EU has a fundamental principle that Domestic and EU members must be >treated the same. By protecting Icelandic depositors 100% the same principle >has to be applied to EU depositors.
>
>This is an overriding principle and it the reason that the EU instructed Iceland >to pay up.
As detailed source document with legal opinion above will make clear — you need to get someone to read it and then explain it to you.
Here also again is good source analysis from Bjarni who alrady explained underlying EU issue for you — but still you come back to same nonsense as if you never read it — and posts of others before :
http://www.icenews.is/index.php/2009/06/16/where-have-all-the-billionaires-gone/#comment-82475
To the author – you must agree with the professor being that you start your article with his quote. Why not just come out an say you also think everyone opposed to the loan is a stupid??
to the people of Iceland – don’t take the loan. You should not be held responsible for the crimes of bankers. Are you held responsible for burglaries, for car crashes, for lost airline luggage, for fire damage? No! Then why should you be held responsible for bank losses.
When people deposit their money into banks, they are lending them the money. This is not the way it used to be, but it is today. And since that is the case, people lend money to a bank, they need to confirm the bank can repay the money at any time. They should also spread their money across many banks, in case one should fail or be discovered as fraudulent.
I have six bank accounts, located in three countries, and the monies I use are USD, CHF, gold and silver. I have diversified across banks, countries, and money types.
In this day and age, it’s easy to open up many accounts online. Then just transfer your money.
>to the people of Iceland – don’t take the loan. You should not be held responsible for the crimes of bankers.
You’re saying that without knowing the consequences of not taking the loan. Ultimately, it doesn’t matter which course is the morally or ideologically correct one. What matters, to Iceland anyway, is what course is best for them.
Until you consider the effects of refusing the agreement, how can you possibly tell them not to take the loans?
@Dave Doctor
>people lend money to a bank, they need to confirm the bank can repay the money at any time.
Do you mean – check that they have a guarantee that covers your deposit?
Thanks Dave – good idea :)
Dave Doctor said:
“When people deposit their money into banks, they are lending them the money. This is not the way it used to be, but it is today. And since that is the case, people lend money to a bank, they need to confirm the bank can repay the money at any time. They should also spread their money across many banks, in case one should fail or be discovered as fraudulent. I have six bank accounts, located in three countries, and the monies I use are USD, CHF, gold and silver. I have diversified across banks, countries, and money types.”
I found what you have said very outraging. Not many people have the luxury to open bank accounts in three different countries. I could have saved my deposit in Kaupthing, Landsbanki and Glitnir but they can just all blow up at the same time. If what you are saying is acceptable, it just open up a legitimate path for banker to rob depositors money legally. The burden of regulating the banks, making sure they behave properly, should be on the government side, not depositor. I couldn’t believe the grandma landlord I was living with has the profession to distinguish which bank is more trustworthy than the others.
@Terry – I mean a person should either check that the bank’s finances are solid, and most are not, or only deposit enough money that could be lost, in the same way one would buy stock, knowing you might lose all your money. Or find a bank that provides what banks used to provide: storage, for a fee. I think the only easy way to do this is to get safe deposit box, or actually have a few boxes at many banks.
@Bromly86: The people of Iceland should not take the loan and they should tell the world they are not responsible for bank failures and the loss of depositors. There’s an old saying, don’t go to a hardware store to buy juice. And depositors should not ask the people of Iceland to cover the lost deposits. The people of Iceland did not run the banks. They only live in Iceland. I don’t want to be held responsible for bank fraud in my city. And there’s no need to join a union of states, like the EU. Hong Kong did very well for many years, and the country has no natural resources. Singapore is doing well also.
@kina123: It is not a luxury to open many bank accounts. Anyone can open a bank account online overseas with 50,000 krona (is that 300 euros?). Try it. And as for the elderly woman who rents you a flat, she has the means to determine which banks are honest, just as she has the means to determine which mutual funds to invest in. We don’t need government bureaucrats to rate mutual funds, nor do they need to review banks. And anyone who does not feel comfortable evaluating banks should, as I mentioned above, open a few bank accounts, use safe deposit boxes, or keep the money at home in a safe bolted to the floor. We are not depended on the government to determine what is safe or not safe — and thank heaven for that.
Be that as it may Dave, my point still stands.
Oh, and I hardly think Iceland wants to model itself on Hong Kong, but maybe the old lady I saw sweeping the streets was doing it for fun.
Dave Doctor said:
“When people deposit their money into banks, they are lending them the money. This is not the way it used to be, but it is today. And since that is the case, people lend money to a bank, they need to confirm the bank can repay the money at any time. They should also spread their money across many banks, in case one should fail or be discovered as fraudulent.”
I see, you have decided to change the definition of a bank, obviously to your own benefit, as a ‘investment’. Only Non-Icelandic depositor’s of course.
This new reality you have invented no doubt absolves Icelandic voters from the responsibility of voting for the government that put its taxpayers in the banks debt.
Why should Icelandic voters and Icelandic bank depositors be protected from their actions yet non-Icelandic bank depositors (who have received written and verbal guarantee’s and contracts from the Icelandic government) be entirely responsible for their innocent actions?
Iceland; searching new definitions for: Guarantee, Legally Binding, Bank and Honesty.
Dave Doctor
You seem to think a bank has nothing to do with the government. Wrong! A bank is a legal classification of entity created by governments through acts of parliament. In simple terms they are organisations licenced and regulated by the state. Banks thus carry both implicit and explicit guarantees provided by the government they are licenced by. The banks are controlled by the state and have priviledged access to funds and support from the Central Bank.
Banks are NOT financial investment companies – they are licenced deposit-takers.
And that brings me to the second point. When an individual deposits his or her money in a bank it is a deposit, it is NOT an investment. Two things characterise this difference. First, the deposit remains as money, it is not transformed from one financial asset into another. The money does not assume a new risk/return profile (even though a bank may offer a return). Secondly, the money remains the property of the depositor – it is not the property of the bank. The bank holds the money as a custodian and the money must be repaid on demand (even if a time delay is involved in term deposits).
This explains why governments are ultimately resposnible for the operation of banks, and why they put in place deposit guarantee schemes. Such schemes act as a form of reassurance to the ordinary Joe – he doesn’t have to start worrying whether a particular bank is safe or not – and they also limit the operation of what a bank can do with the money it holds. (Capital adequacy ratios acheive the same effect.)
Icelandic banks hold licences from the Icelandic government to act as deposit-takers. The fact that the Icelandic government acted as guarantor to the banks but then failed to control their operations does not relieve the government of the responsibilities taken on when it issued the licences.
I asked someone in the office to look up the Icelandic legislation. Here it is:
http://eng.vidskiptaraduneyti.is/laws-and-regulations//nr/2826
It’s all there as I expected it would be.
Look at Article 3. It says at the start:
“The following activities shall be subject to operating licences pursuant to this Act:
1. Receipt of repayable funds from the public:
a. Deposits.”
So there you see that a bank must have a licence to do certain things. A licence issued by the government (or agents acting on its behalf).
Also we have a neat definition of a deposit: it is a “receipt of repayable funds from the public”. Can’t get much clearer than that. A deposit is NOT a loan, and it is NOT an investment, it is a repayable receipt. The key word is “repayable”. This implies the two things I mentioned: the nature of the funds do not change with the receipt by the bank, and also the funds remain in the ownership of the depositor. The bank acts as a secure holding place of storage for the money, and has to give it back if asked. It is legally mandated that the bank has to give the money back on demand. End of story.
But to go further – most developed countries want their citizens to feel that their money is safe in a bank. The one thing a bank cannot withstand is a “run” – when everyone decides to demand their moeny at the same time. So various guarantees are made. That is where the deposit guarantee comes from. The Icelandic government licenced Landsbanki to act as a deposit-taker and is the only competent body to act as guarantor of the deposits. End of postscript.
@Dave Doctor
>to the people of Iceland – don’t take the loan. You should not be held responsible for the crimes of bankers
>Terry – I mean a person should either check that the bank’s finances are solid, and most are not, or only deposit enough money that could be lost, in the same way one would buy stock, knowing you might lose all your money
As Mike (UK Nordic analyst) says – (thanks Mike your posts are great stuff).
‘Wrong’.
The UK taxpayer – their children, and possibly grandchildren, will pay the cost of holding our banking system together – so depositors – UK and foreign don’t lose.
Why should we pay for your misfortune also?
I know if the rolls were reversed the dutch and UK tax payers would also reject the deal. If they were only 300,000 people they would fight just like the Icelanders but they are not. They are millions and can spread the costs. Why should Icelandic people take a deal that other countries are blackmailing them to take!! Just because they will profit from it. It’s school boy bullying. I was always brought up to believe that if someone owed you money then you go after that person not someone else. Why not chase the banker’s who can not pay what they did. I am sure the Icelandic people will do the right thing and pay but only if it’s a fair deal. Not a profit that Brown can make to cover his mistakes.
Come on Iceland don’t take the deal.
@ peter-london and bromley 86 you both sound like you lost some money through Icelandic bank’s. Would you both take this deal and think it’s fair for the Icelandic people. Or don’t you give a s**t about the Icelandic people!! Why are they holding back so many papers from the public. Maybe our Q&A would be alot different.
Deposits are assets owned by a bank which are also liabilities owed to depositors. So, how is a time deposit at a bank different to an insured loan to that bank?…
Mike (UK Nordic analyst), now that we know the interest rates– it is more clear why you said what you say about sovereign default in this post back in April :
http://www.icenews.is/index.php/2009/04/21/imf-iceland-delay-“not-really-a-problem”/#comment-73388
Despite what you say about comparing loan rate to US treasuries — let us face it — US treasuries no longer will be the gold standard given amount of money been printed. ( See for example recent article by Arthur Laffer in Wall Street Journal . )
What would be more reasonable would be either based on percentage based on what EU loans to other country is ( 3.5% ) or IMF loan rates. We have to remember while HMG has to nominally borrow what they are loaning here — they actually print the money itself.
Similiar for Dutch in that Dutch do not set interest rates in the Eurosystem but they do get they money at the lower rate for this kind of thing.
But let us say that 5.5% is the rate well then we should have something as capping the payments at a 1-5% of exports per year. Why that is not in the final agreements we see I have no imagination of the reason why not other than incompetence of Steingrímur in directing this ( and lesser degree Jóhanna who clearly just doesnt care as long as we go to EU so she can get he policy implemented via EU ).
( Bjarni analysis on default from this loan is in this great thread: http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/#comment-83787 . )
It is clear that IMF money has been taken for a specific purposes — but have to wonder why this loans are at such better rate than UK and Dutch loans.
And maybe I wonder that the loans had to be agreed before same governments would block IMF loan to make sure that that IMF or other loans could not be used later at better interest rate to pay back this liability.
I and others do not dispute actual amounts of liability if assets do not cover — even if I think it disgusting thatwe pay for EU burecrat applying mistake on freedom of freedom of establishment idea of branches to banking that we took as part of EEA.
That Landsbanki did not get from branch to subsidiary in time is another matter of investigations but clearly UK was being difficult until last weekend prior to collapse in October when the issue of the GBP 200 came to head: http://www.icenews.is/index.php/2009/03/16/kaupthing-uk-legal-case-makes-high-court-progress/#comment-69074
( What I find interesting is that Dutch did want to get IceSave into more membership of it own Netherlands bank insurance system but because it branch not subsidiary it was not permitted by EU directive 94/19/EC to do it either. )
I was also scratching my head about why suddenly there was the encouragement and support of the UK to join EU for Iceland in April:
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=28304&ew_0_a_id=323094
I think it is no coincidence that this enthusiasm from UK came a couple of days before you post. You do have you finger on the pulse there Mike.
If Iceland is part of EU then it is under the EU commission and not EFTA Court so there is far more likelyhood of later debt agreement judgements to immediately result in assets being given over to UK and Holland when inevitible default occurs under current IceSave agreement in few years time.
I thank you Mike for bringing this to light.
If you’d been following the news, you’d have seen that no retail depositor with a UK Icesave/KE a/c is out of pocket :) . Still, you do have a point in that if I hadn’t had a close call or two, I wouldn’t be here.
As you seem to want to personalise it, then no, I don’t give a shit what happens to anyone in Iceland. I don’t know anybody there and there’s a certain karmic justice (at least as Sharon Stone defines it). And frankly the self-pitying terrorist thing doesn’t exactly endear Icelanders, as a whole, to me.
That said, I bear Iceland no ill will. One of the consistent themes from my posts since the Agreements were announced (and even before) is that it’d be nice if, rather than saying “we can’t”, “we’re not”, etc., the various journalists, economists and politicians would state the case for and against.
That way, although the decision rests with the Icelandic government, at least the people would know exactly what the alternatives were.
Back on subject. You seem to cover a number of positions in your post, from not accepting the guarantee liability to accepting it if the terms are right. Would you accept the Agreements if they were at 4%, which I believe is what the UK borrows at?
Mike (UK Nordic analyst):
>I asked someone in the office to look up the Icelandic legislation. Here it is:
>
>It’s all there as I expected it would be.
Yes, and all modified to be compliance with EU Directives that were written into law since late 1990s at latest:
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/#comment-84412
Before you talked about accounting irregularities in another thread with regards to FL Group I think — geniuninly I am interested for you to list them — you did not yet though –
but I assume that you as knowledeable Mike will not be one that denies that we had same level of regulation — and standards as EU memberstate has in this banking.
Actually more I look into UK supervision of Northern Rock, RBS, etc. the more I see that Iceland is far more like UK in way it handled its banks since 1999 than I was expecting.
Really both UK FSA and Icelandic FME have done the same things with very similiar models ( splitting of powers to FSA from Central Bank ).
And they have had they banks that have failed spectacularly. RBS failure is spectacular. It is different type of failure than Landsbanki and Glitnir ( unlike Northern Rock which is very familiar to people reading about Landsbanki ) but it comes from a similiar direction regarding the supervision that was done on it by UK FSA and Treasury.
My gods, I think, what would the UK have done if it had had EURO instead of GBP with the failure of RBS ? It really would have been horrible without that currency devaluation UK just went through.
>>Come on Iceland don’t take the deal.
The have no choice in the matter. The choice is betwen being kicked out of the EFTA or making the payments in 7 years. There is no other option.
All this discussion is immaterial as its already been decided by legally binding arbitration. Iceland has to either break its own laws (EFTA laws will be part of Icelandic law) and starve or pay its debt
@ black jack 1
>I know if the rolls were reversed the dutch and UK tax payers would also reject the deal. If they were only 300,000 people they would fight just like the Icelanders but they are not.
YES! I agree with black jack 100,000%! (Except for the part about rolls reversed. Butter on tablecloth won’t help things.) ANYBODY would fight this raw deal! Say NO to Iceslave!
Afram Island!
Gummi
@Jim – I believe your supporting my side of the argument. Yes? If so, many thanks.
@Terry – You wrote, “The UK taxpayer – their children, and possibly grandchildren, will pay the cost of holding our banking system together – so depositors – UK and foreign don’t lose.” Why are you taking it on the chin for the banking system? It’s not some magical business. They simply rent money. You, and your children, etc. don’t need to hold the system together. Force banks to hold 100% of their demand deposits (checking and savings) and the system will be stable. No runs. The way banking used to be.
@Blackjack – Exactly! Because there are only 300,000 Iceland citizens, compared to millions in other countries, we all can see the real crime: indenturing citizens to cover private bank losses.
I feel very sorry that so many people lost money in these crooked banks. And there is probably no way to get that money bank from the thieves. But let’s not allow the icesave depositors, led by the UK and Netherlands politicians, to now rob the people of Iceland.
To use the language of the “Plan B” article on this site. It seems Plan A is to rob the people of Iceland by saddling them with a loan that can never be paid back, while Plan B is to let the icesave depositors sue the original bank owners and employees.
>Force banks to hold 100% of their demand deposits (checking and savings) and the system will be stable.
And where does a small business get their loans from then? Seriously, what would you do about cashflow in this ultra-stable banking environment?
The golden age of banking that you’re referring to happened when economies and class structures were very fixed and inequitable. And there were still loans amoungst those at the top.
@Bromley86: With 100% reserve banking, also known simply as storage, banks charge customers to hold their money. Loans do not come from these deposits. Loans are made with money in “time deposits” such as CDs. Person One agrees to lend money to a bank by investing in a CD that can be redeemed in 6 months, one year, etc. in exchange for interest on the deposit, such as 5%. The bank lends the money to Person Two at a higher rate, such as 7%.
But I don’t want to get off course from the topic of this article. Plan B is to protect the people of Iceland–those who had nothing to do with the main banks–from getting robbed by the Iceland, UK and Netherlands politicians to pay off the losses of icesave depositors.
Brumley wrote:
>Back on subject. You seem to cover a number of positions in your post, from
>not accepting the guarantee liability to accepting it if the terms are right.
>Would you accept the Agreements if they were at 4%, which I believe is what
>the UK borrows at?
I assume you are reply to Dave Doctor ?
Dave Doctor, I am sure you see my reply to you here:
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/#comment-84409
Bottom line is that the 5.5% interest for 7 year with repayment must be capped at a precentage of yearly exports (say 1-5 ), if Iceland is to avoid sovereign default.
A longer term and lower interest rate of course, but capping repayment to what can be paid is key. That way would also be fair that when income might come from oil and gas then if Iceland can pay it will.
Dave Doctor, this is not really place to debate merits of sound money and problems of fractional reserve banking. World operates on fractional reserve banking and all this will happen is that legal requirement of reserve ratio go up.
That is best can be expected from politicians worldwide. Main problem is idiot politican doing these bailouts — not understanding that while Federal Reserve in US did cause Great Depression, today giving all this “liquidity” i.e. printing gigantic amount of money and throwing it down gurgling drain of banks who will just use it to plug huge blackholes in balance sheets do not solve the problem.
You are not going to convince Icelanders that they liability on IceSave do not exist. It does. And Icelanders pay they debts.
It is terms of repayment deal to UK and Holland ( number of years and interest rate, lack of capping to exports ) that is problem.
Peter – London
>The have no choice in the matter. The choice is betwen being kicked out of
>the EFTA or making the payments in 7 years. There is no other option.
Really and you have the signed document from the decision of the EFTA Court after case regarding this to back that up do you now Peter?
>All this discussion is immaterial as its already been decided by legally binding
>arbitration. Iceland has to either break its own laws (EFTA laws will be part of
>Icelandic law) and starve or pay its debt
Once again you dazzling knowledge of the laws regarding the EEA and Icelandic law blind me with they brilliance.
And your ability to ignore facts.
Even ones made clear earlier in the * same * thread:
http://www.icenews.is/index.php/2009/06/26/rejecting-icesave-deal-could-be-akin-to-declaring-war/#comment-83706
Fisy wroite:
“Really and you have the signed document from the decision of the EFTA Court after case regarding this to back that up do you now Peter?”
I havn’t but the Icelandic government has. If you read the links I posted you will see that the final, binding decision by the EFTA court was in November 2008. Final and binding mean there is NO other legal action that Iceland can take.
Legally binding and final; Do you understand that concept or do you need me to explain it further?
Peter – London
>If you read the links I posted you will see that the final, binding decision by the EFTA court was in November 2008.
Peter – London do stop this bluster.
You know full well that there is no decision by the EFTA court saying any thing at all about Iceland “being kicked out of EFTA or making the payments in 7 years”.
And that there is no case pending at EFTA court regarding that. And EFTA court is only one with power about this.
Dont make assertion about this or that unless you can back it up because it makes you look like a fool and just derails actual constructive debate.
@ Dave Doctor
>You, and your children, etc. don’t need to hold the system together. Force banks to hold 100% of their demand deposits (checking and savings) and the system will be stable. No runs. The way banking used to be.
Well – we live in the real world, and have to face that reality. Iceland will have to fulfil its obligations – the question relates to what is fair and affordable.
If the agreement is not ratified by parliament, war won’t be declared. It won’t be the end of the world. Instead, a slightly lower interest rate will be agreed and then ratified. Where the original negotiators were weak, parliament can do their job instead. Around 4% should indeed be the sweet spot.
Frisy wrote that “Icelanders pay their debts.”
Yes – their own. Not the one’s of bankers. There is no honor for the people living in Iceland, who were not involved with the banks, to take out a loan to give money to icesave depositors. It’s madness.
Discussions about the terms of the loan, whether it be five or seven years, or tied to exports, or capped at 4%, only distracts us from the the new crime of stealing from the people of Iceland. It’s like paying a ransom for one’s head that is tied to your income to keep you just above subsistence. It’s like serdom.
If thieves come to your home, you don’t negotiate a payment plan. You kick him out. If the thieves are your elected politicians, then you find new politicians. You find politicians who don’t arrogantly say, “there is no Plan B.”
All the press laments the depositors…What about the people of iceland who had nothing to do with the banks and who are now being enslaved (through a loan) to pay off the depositors? This plan will simply make the Iceland people the new victims–the new depositors. It will be the Iceland people who lost money in the banks, not the original depositors.
Someone is going to have to take a loss. Should it be the iceland fisherman who stayed clear of the banks? Or should it be the people who deposited money in the banks to get a high interest rate?
“Legally binding and final; Do you understand that concept or do you need me to explain it further?”
When dealing with a sovereign nation there is no such thing as legally binding. Hence the name “sovereign”.
Dave Doctor, you are aware that all the Icelandic depositors in Landsbanki were repaid in full? Under your argument, why should they have not just taken the loss also? And once they have been repaid, why should the UK and NL depositors not be, given that they were promised that their deposits up to the guarantee limit were guaranteed by the Icelandic state. Icelandic state = Icelandic taxpayers = Icelandic people. If the Icelandic people did not want to be liable for the guarantee they should not have elected a government which allowed (even encouraged) Icelandic banks to use the guarantee as a passport to open branches in other countries and take billions of dollars in deposits. They should not have elected a President who came to London and bragged about how only Icelanders have the balls to handle such high-leverage finance.
Fisy:
“Peter – London do stop this bluster.
And that there is no case pending at EFTA court regarding that. And EFTA court is only one with power about this.”
Stop post rubbish about Iceland going to to the EFTA court. It isn’t going to court is it? and it cannot do so becuase the decision has already been made.
Iceland have to abide by the descision, they have no option.
Its Final and Binding.
Go and look it up (Binding) becuase I’m not going to explain it to you.
Dave Doctor:
>Discussions about the terms of the loan, whether it be five or seven years, or
>tied to exports, or capped at 4%, only distracts us from the the new crime of
>stealing from the people of Iceland. It’s like paying a ransom for one’s head
>that is tied to your income to keep you just above subsistence. It’s like serdom.
>If thieves come to your home, you don’t negotiate a payment plan. You
>kick him out.
As I explain this thread — that analogy not reasonable.
No matter how we all feel about this Iceland signed up to the EEA agreement and took this horribly flawed directives on depositor insurance into its law — we entered into a contract and live up to it :
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/#comment-84569
However there are conflicting clauses in that EU Directive 94/19/EC regarding the recent case of Iceland ( i.e. that the EU burecrat authors of the directive either decided to ignore or didn’t foresee the potential for situation to arise where the payment of the minimum deposit guarantee would simply outstrip the member state banks or even country’s ability to pay — but they still state that “..this [financing capacity of such schemes must be in proportion to their liabilities] MUST NOT, however, jeopardize the stability of the banking system of the Member State concerned”):
http://www.icenews.is/index.php/2009/06/16/where-have-all-the-billionaires-gone/#comment-82056
So this need to go to impartial third party for ruling. Not some kangeroo court arbitration like EU tried to shanghai Icelandic government into in November 2008.
>If the thieves are your elected politicians, then you find new
>politicians. You find politicians who don’t arrogantly say, “there is no Plan B.”
But yes think that going to happen soon enough.
Optimist said:
“Legally binding and final; Do you understand that concept or do you need me to explain it further?”
When dealing with a sovereign nation there is no such thing as legally binding. Hence the name “sovereign”.
Thats why we have international laws, agreements, the UN an other international bodies. Its also why we have wars.
Iceland doesn’t have to abide by their signed agreements, but neither do any other countries have to recognise Iceland’s rights. Sanctions can be applied, assets seized. If countries decide that they don’t like Iceland’s territorial claims, what’s going to stop them taking them? the Icelandic navy?
Andy said:
>And once they have been repaid, why should the UK and NL depositors not
>be, given that they were promised that their deposits up to the guarantee
>limit were guaranteed by the Icelandic state. Icelandic state = Icelandic
>taxpayers = Icelandic people.
It’s interesting question but the liaiblity is for the minimum only because that is what the EU Directive 94/19/EC specify.
Mike (UK Nordic analyst) bring up interesting point about this and law splitting into old and new banks:
http://www.icenews.is/index.php/2009/04/15/dutch-savers-demand-answers-from-iceland/#comment-72393
but since Ireland — by unilaterlaly decide to insure 100% of bank depositor for 2 years for main local registered bank and 100% up to EUR 100K for smaller and foreign branch — started the race to the bottom in who could insure most deposit, many EU memberstate have been discriminating in this way and EU commission want this whole aspect nowhere near impartial judicial process as I explain here :
http://www.icenews.is/index.php/2009/04/15/dutch-savers-demand-answers-from-iceland/#comment-72438
As to general idea of expecting get a nice 6% plus interest rate and no risk and depositing like that ..
This concept is what gets this slippery slope to massive inflation as this guarantees comes from somewhere. Seperate to this we have the bailouts which are just in a way an extension of same thinking.
The solution to this banks making ridicilous risks is to put them into receivership — then good banks and people that did not act heedless pick up the assets after bancrupcy.
Without it we see this zombie banks — and the clock turns back to the moribund times of state ownership and stagflation where people standard of living stays put and inflation robs them of they wealth.
Because once you have zombie banks you get also other zombie companies as well because zombie banks wont foreclose on the loans.
@Dave Doctor, Andy said
“They should not have elected a President who came to London and bragged about how only Icelanders have the balls to handle such high-leverage finance.”
I think he may have been referring in particular, to a speech made by Mr Grimsson – (is this correct Andy?)
http://forseti.is/media/files/05.05.03.Walbrook.Club.pdf
It is a fine example of hubris.
Fisy said
>No matter how we all feel about this Iceland signed up to the EEA agreement and took this horribly flawed directives on depositor insurance into its law — we entered into a contract and live up to it :
Fisy is well read on this topic (better than I), and although I disagree on his proportioning of blame, and like to tease him re this :) – I think you would do well to accept his opinion on this issue.
@Peter
>If countries decide that they don’t like Iceland’s territorial claims, what’s going to stop them taking them? the Icelandic navy?
Precisely Peter – in the link about Grimsson’s speech, you will see.
“Each time Britain sent the Navy to stop us but each time we won – the only nation on earth to defeat the British Navy, not once but three times. With this unique track record, it is no wonder that young entrepreneurial Vikings have arrived in London full of confidence and ready to take on the world!”
What a horrible scenario our clueless greedy politicians have created. Horrible for the KSFIOM depositors who have had their money taken. Horrible for the Icelandic and UK taxpayers who have to pay horrendous taxes for the bail-outs. A big 10-year Ponzi scheme on all sides – buy an overpriced house in a system that can only work if your kids pay twice as much for it, out of their earned income. It makes you despair. At least your governments in Iceland didn’t pretend to be caring, sharing socialists while selling poorer folk and future generations down the river, for the benefit of the bankers. Why not just pass a law stating that all bank salaries in the past 10 years above x have been improperly obtained and a retrospective tax of 80% applied on them. SHould reduce the tax burden for everyone else and make those who caused this suffer an appropriate sanction.
In a more serious note, it looks like Kris will be evicted on Friday…
Terry said:
“Precisely Peter – in the link about Grimsson’s speech, you will see.
“Each time Britain sent the Navy to stop us but each time we won – the only nation on earth to defeat the British Navy, not once but three times. With this unique track record, it is no wonder that young entrepreneurial Vikings have arrived in London full of confidence and ready to take on the world!”
Seems the Icelandic ability to delude themselves hasn’t gone away. You think Iceland won a shooting war? It was a battle of public opinion. The world is very different, Iceland would be acting in an internationally criminal way and the British public would cheer at the prospect of war against an aggressor. Killing Icelanders to get our money back would be a vote winner and I’d prefer to get rid of Brown than the money.
Peter – London
>It was a battle of public opinion
And this bullying by the EU commission and this “offers” of 5.5% interest for 7 years, etc from UK and Holland, following the way that Brown and Darling attacked Iceland reputation ..
Do you think that this won’t go differently?
When the facts about taking down of kaupthing Singer and Friedlander by the UK FSA for the political reasons comes out in UK high court judicial review do you think London will be seen as safe haven for international capital ?
While general public in UK wont care as much as many beleive still what they read in papers and see on TV and as long as they money has been “made safe “, but you can be sure people internationally who want to have a safe base for they companies will be taking notice.
Icelanders will pay they debts — but not via a deal that will almost guarantee sovereign default. And our reputation will recover.
But what Brown and his cabinet have been doing means 10-15 years of hell for UK tax payer and onwards from that. This rolling over to EU on regulation of The City also may mean the end of one of the main source of income for country too. But at least you have the pound not the Euro for the troubles EU eurozone has coming ahead.
>Killing Icelanders to get our money back would be a vote winner
Here you go again try to push the conversation down into ad hominem trolling gutter. Oh and let me say what nasty piece work you are Peter. I would not like to meet you in dark alley. Or good lighted street for that matter.
Peter – London wrote :
>>“Peter – London do stop this bluster.
>>
>>And that there is no case pending at EFTA court regarding that. And EFTA
>>court is only one with power about this.”
>
>Stop post rubbish about Iceland going to to the EFTA court. It isn’t going to >court is it?
As explaining but you refuse to listen — the only entity which have power to fine and sensure Iceland in EEA matters is EFTA Court.
I was of course replying to you silly post that:
” The choice is betwen being kicked out of the EFTA or making the payments in 7 years. There is no other option.”
I think all other read of this get the idea, so stop the bluster Peter as I am sure it getting annoying for other reader of this thread.
Fisy
“When the facts about taking down of kaupthing Singer and Friedlander by the UK FSA for the political reasons comes out in UK high court judicial review do you think London will be seen as safe haven for international capital ?”
Dream on. What it will do is highlight the corrupt nature of Iceland’s political and banking Mafia. Those banks should have never been allowed to operate within the EU, but the EU couldn’t stop them as they were protected by Iceland’s ‘regulators’.
“Iceland reputation ”
Well, I for one have learned a lot about Iceland’s way of business since this crash. Previously I had nothing but respect for Icelanders. I now know that Iceland’s governing and banking system is thoroughly corrupt. Where concepts like Guarantee, Legally Binding and equal treatment of depositors simply don’t exist. It didn’t take a few words from the UK to do that.
“This rolling over to EU on regulation of The City also may mean the end of one of the main source of income for country too. ”
Its a big source of income, but the main source? no way. More like 8% of GDP. Nothing like as big as for Iceland, where it truly *was* the main source of income. UK taxpayers will be paying the same level of debt off for decades, just as Icelanders will be; just without the self-pity.
If I understand this correctly, the balance of probabilities is that there was no political motive for the FSA moving on KSF.
The currently available facts for those political reasons existing, along with any counters, are:
(a) The order was sealed. AFAIK no one has shown or said, from knowledge, that this would be unusual.
(b) Kaupthing was to be supported by the Icelandic government and so wasn’t going to not be able meet the threshold conditions. This assumes that they could find enough money and that a full blown run would not take place.
Any supportable facts missing?
Just an outsider’s opinion, but couldn’t the government of Iceland create it’s own currency valued upon the labor skills of its people and its natural resources? To whom exactly is all of this money owed that Iceland needs to go into mountains debt to pay?
And WHERE did these deposits from UK & NL go? Money doesn’t just disappear.
ecuador, brasil , argentina, rusia ,mexico …the list of countries that have defaulted in their obligations goes on and on …and they surely are no pariah and continue to exist and trade whith the rest of the world . All this nonsense of iceland sinking…what is incredible is that icelanders voted for capitalist solutions …you need comunism and you need it urgently .
My friends, I see anger in these boards. Anger! And I feel your pain. We libve through desperate times, these have touched even Gummi. I share my recent sorrow…
Having recently finished building my summer estate near Thingvellir (8,000 sq. meters of Ikea-like splendour), I was about to drive off to Keflavik (to see my banker in the Caribbean, áfram Island!), when the Hummer stalled in the driveway. After I lovingly whacked Gummi Jr. on the head with a tire iron (to silence the festive lad), I gazed upon my splendid homestead, shut off the ipod, and like Gunnar of Hlidarend I whispered: “…How lovely the slopes are. Never have I…but wait a minute…wait…what’s that smell? Did I leave the gas on?”
As fate would have it, it was my Lithuanian plumber. The fool, searching the basement for vodka, struck a match. They say the explosion was heard as far as Akureyri. The sky lit up like New Year’s Eve. And yes, my splendid 3-million krona estate went up like a Finnish Nagasaki. Casa de Gummi, the first birch-and-pine satellite, now orbits the earth.
And what was left (besides the loan)? Ah, the grief. My 30-person Jacuzzi is a pit of melted fiberglass. My BMW’s are blackened steel shells. My 200-inch plasma screen is a shard of burnt glass. And a scorched bottle and a slag of jewelry is all that’s left of the accursed Lithuanian.
But I do not indulge anger. That is a story, my friends. A story of loss. Of grief. But we are iclenaders. We are not deterred. We are tough and we will survive!. To prove it I am establishing the Rebuild Casa de Gummi Foundation, at First National Tortola Bank. And yes, we are not too proud to accept donations (all currencies).
Áfram Island!
Gummi
Pray the rosary in groups for Iceland — it saved Austria, it should save you too.
Gummi:
LOL thx for this fun comment!
@Peter -London
>You think Iceland won a shooting war?
Actually – No…..it was irony – an extract from a hubristic speech by Mr Grimsson (as I mentioned).
I am pretty ambivalent about the future of Iceland, and Icelanders, but I would not wish them harm.
Good old Gordon returned my money, and I am grateful, although I would not vote for him. However, this burden has fallen upon my fellow taxpayers – so naturally, I am interested in how this matter is resolved. Also, through following postings on this site, I have become interested in Icelanders – they are an intriguing people.
Now, I must check how Anglo-Irish is doing. Bromley86 – I recall your comment re KE. – I did Anglo on a 2 year fix, after IceSave ..we shall see.
prayer is good… though i do not know who the god rosary is?
i believe that everyone should wake up to the realization that the same folks who have funded wars in the past two centuries have risen to international banker status….
Isn’t it strange that the political elite in the United States and England are as related to each other as the citizens of Iceland are to each other ? i’m talking bush, cheney, diana, kerry, etc, sharing the same great-great-great-great-great-great grandparents (give or take)….
i thought that only happened in iceland.
but don’t worry there will be many more jobs when the rockefellers, royal families, turner’s, and other billionares implement their 90% world population reduction.
they’ve even setup monuments declaring their intentions…
“1. Maintain humanity under 500,000,000 in perpetual balance with nature. ( mass homicide )
2. Guide reproduction wisely – improving fitness and diversity. ( mass eugenics )”
the list continues…
http://www.radioliberty.com/stones.htm
unfortunately we are facing the need for a R3VOLUTION here in the states… actually a Restoration to the principles of conservatism and liberalism -> freedom of the individual. no white rights, no black rights, no women rights, no men rights…. just rights of the _individual_ , the natural rights of life, liberty and the pursuit of happiness.
something that the EU cannot and will not offer.
and where are the IceSave compromises ? If the international community wants to strong arm the Icelandic citizens into paying for the deeds of the bankers (icelandic and foreign- see above remarks on this being designed)…. then where are the creative solutions from the involved nations in assisting the Icelandic economy? for example, business partnerships, tentative agreements, etc…
but now i’m definitely rambling on…
‘afram ‘island…. sjaumst ‘i halfmanadur…
“Rechill said:
And WHERE did these deposits from UK & NL go? Money doesn’t just disappear.”
Atually its not really the money Britain and Netherlands want, they want the country
they could go after the money if they wanted to,
much of it is sitting in tax havens and many of them are British.
This is something every one should take time to watch
http://larahanna.blog.is/img/flvplayer.swf?file=http://larahanna.blog.is/users/3b/larahanna/videos/8072-7227.flv&autostart=true&fs=true
http://larahanna.blog.is/img/flvplayer.swf?file=http://larahanna.blog.is/users/3b/larahanna/videos/8069-7227.flv&autostart=true&fs=true
this gives people some insight into the future we can expect
Gummi “Having recently finished building my summer estate near Thingvellir (8,000 sq. meters of Ikea-like splendour)
looks like its gone too :)
http://visir.is/apps/pbcs.dll/gallery?Site=XZ&Date=20090710&Category=SKODANIR03&ArtNo=908839897&Ref=PH&Params=Itemnr=4
Peter – London said: “UK taxpayers will be paying the same level of debt off for decades, just as Icelanders will be; just without the self-pity.”
———————–
No self pity for the British taxpayer? Already the moans from the British pubic are as loud as the squeals from pigs in the waiting room of the slaughter house.
Maybe it will be the indirect taxpayer, in the form of the mass ranks of the unemployed, who will take the larger share of self pity, the employed taxpayer who will take the share of moaning and anger and most everybody will moan and be angry about about the cuts to public spending.
That’s what they’ve got at the moment. The problem is that far too many people who don’t want to are holding markers for the future productive capacity of Iceland.
In theory that’s a self-correcting mechanism, in that the currency devalues because fewer people want it, so the country’s reserves aren’t placed under pressure (unless they choose to spend their foreign currency to try to support their own currency’s exchange rate). Imports are more expensive, so people buy less, and exports are better value abroad, so foreigners buy more.
In Iceland’s case though, they are unusually dependent on imports. So if the ISK devalues, it’ll be painful. That’s further complicated by a large number of Icelandic households being in the again unusual (for the rest of the world) position of owing money in foreign currencies. If the ISK devalues further, they default, which I think means bankruptcy and forced sale of assets at a time when things like the housing market are essentially static (i.e. no one is buying).
On the debt front, there are a number of issues. The markers I referred to above are the glacier bonds – basically existing debt in ISK. Part of the ~$5bn that Iceland hopes to borrow from the IMF/Nordic countries is going to be used to buy ISK to prevent the exchange rate falling too fast.
Part of that ~$5bn is going to be used to recapitalise the domestic parts of the banks (the New Banks).
Part of the ~$5bn is going to be used to ease the transition from what the government expected to be able to spend on services over the next 5-10 years and what they would otherwise be able to if they hadn’t borrowed the money. Remember that tax receipts will fall whilst welfare payments will increase. I’m sure that there will be harsh cuts, but the idea is to make them less harsh.
That $5bn is pretty-much elective. They don’t have to borrow it, but people from both sides of the political spectrum want to because they fear the effects of not borrowing it.
The rest of the debt is the Icesave debt (owed originally to the foreign depositors, but now to the governments of the UK and Netherlands, as they have paid the original depositors). That arises from state backed deposit guarantees (although there is some argument as to whether the state is required to back them). Something like 4bn euros? That’s what this article is talking about. Failure to back them may lead to a few things though:
1. Not being allowed into the EU (no biggie, as most of the population don’t seem to want to join)
2. Being kicked out of the EEA. A problem as most of Iceland’s trade is with Europe.
3. No IMF/Nordic loan. Not good, see http://en.wikipedia.org/wiki/Dark_Ages.
Anyway, my economics is rusty, so there may well be inaccuracies in the above.
To Bromley86:
>>>>That $5bn is pretty-much elective. They don’t have to borrow it, but people from both sides of the political spectrum want to because they fear the effects of not borrowing it.
Thanks for good evenhanded overview. You are correct, Iceland does not HAVE TO borrow it, but it will be pretty much forced to. There is lot of reports coming out in the last few days and weeks, about other debt Iceland has that will have to be serviced. This includes:
a) loans by various local governments
b) earlier loans by the central bank to build up the FX reserves (which were completely inadequate). One of these really large FX loans is due in 2011 according to the report that was published alongside with the IceSave legislation. See Mynd 4 (picture 4) in:
http://www.island.is/endurreisn/stjornvold/adgerdir-stjornvalda/samantekt-adgerda/icesave-samningurinn/greinargerd-med-frumvarpi/#
c) loans by Icelandic energy companies to finance their various recent and past infrastructure projects
d) loans by larger Icelandic companies (other than the banks) to finance their investments and projects
It is very difficult to get accurate information about the size of these loans, since most of the official reports only publish aggregate numbers and they are all in ISK (which is useless for comparison, as it fluctuates too much).
But from what is coming out in the recent press in Iceland, is that the total amount of these loans could amount up to another GDP or about 10B dollars or so (this number is easily off by few B). Of course against these loans are various assets, but they still need to be serviced each year on top of any IceSave/IMF/Nordic obligations we take on.
>>>>Something like 4bn euros? That’s what this article is talking about. Failure to back them may lead to a few things though:
1. Not being allowed into the EU (no biggie, as most of the population don’t seem to want to join)
2. Being kicked out of the EEA. A problem as most of Iceland’s trade is with Europe.
3. No IMF/Nordic loan. Not good, see http://en.wikipedia.org/wiki/Dark_Ages.
All of these are on the table, if the Icelandic parliament decides to refuse the IceSave guarantee. From the most recent news, it looks like the Icelandic government does not have the enough votes to pass the legislation in unchanged form.
If the IceSave guarantee is refused, it will be very important that the different governments in Europe keep their cool. Forcing Iceland prematurely into a sovereign default could have enormous consequences, and not only just for Iceland.
With such a high debt load, banks around the world would suddenly have to realize now huge losses from Iceland, that would otherwise have been considered serviceable. And this would also almost certainly preclude Iceland to pay even part of IceSave in the future.
Various discussions are now going on in Iceland to see if its possible to pass the guarantee, with some limits on the payments from the government. This is what I then somewhat jokingly called the purple options in an earlier post:
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/comment-page-1/#comment-83787
>>>>Anyway, my economics is rusty, so there may well be inaccuracies in the above.
I think you got it more or less right. In the current environment and with the lack of accurate information available, everyone would be allowed have some inaccuracies, so long as it is relatively low, maybe just within a billion or two :-)
“If the IceSave guarantee is refused, it will be very important that the different governments in Europe keep their cool”
From an EU perspective, Iceland would have to be punished and be seen to be punished. Defaulting and expulsion from the EEA would be the least of the country’s problems. The inevitable sanctions would hurt much more. Additionally, there wouldn’t be a credible government to manage during the sanctions as the current coalition would inevitably collapse soon after parliament failed to ratify its loan agreements.
On a more serious note, it looks like Karly will be evicted this Friday…
I’m in iceland. Would be cool to meet up with anyone for or against gov’gt plan. Thurs! 5 pm, you name the place in reykjavik. Possibly could meet Sunday am as well. – Dave
On Jun 30, 2009, Vilhjalm Antonsen said:
10 DOWNING STREET
LONDON SW1A 2AA
23 June 2009
Dear Prime Minister
I am delighted that our great countries have reached an agreement regarding the sensitive ICESAVE dispute. However, it has been brought to my attention that conformation from the Icelandic Parliament has not been assured.
Let me make it clear that should the Icelandic parliament reject our agreement, such a humiliation would not be easily tolerated by Great Britain. I am sure you understand that we consider parliamentary support only as a formality in diplomatic relations between countries.
Should the Icelandic Parliament reject the agreement I ensure you that there will be no further negotiations. You must understand that my government can not appear weak when dealing with a country of only 300,000 citizens. We will therefore be obliged to use our influence within the European Union as well as the International Monetary Fund to slow down any aid or development. This might result in cancelling loans and postponing the Icelandic application for EU membership. More serious consequences would follow with gradual isolation of Iceland from the international community.
It will eventually be realized that the Icelandic parliament will have no other options than to confirm this agreement but the time wasted until conformation is indeed unfortunate.
I am deeply sorry for sharing such unpleasant concerns, but I wish you to be fully informed on the vital importance of having our differences solved quickly and easily, so I hope you are able to influence your respected members of parliament. Only if necessary, you may share the contents of my letter to relevant parliament members on a confidential basis.
Let me at last ensure you that it is the full intention of Great Britain to maintain the strong friendship between the two nations. We will certainly acknowledge special interests of Iceland regarding its application for membership in the European Union.
I believe that our two countries will become even stronger allies in the future as we sail through these difficult times.
Yours sincerely,
Gordon Brown
(sign)
I wonder if this letter is genuine after all,
Gordon Brown cant spell.
http://www.thesun.co.uk/sol/homepage/news/campaigns/our_boys/2720283/Prime-Minister-Gordon-Brown-couldnt-even-get-our-name-right.html
http://www.guardian.co.uk/politics/2009/nov/09/gordon-brown-misspelled-soldiers-name