Ogmundur Jonasson, Iceland’s Minister for Health resigned his position earlier today in a meeting with Prime Minister Johanna Sigurdardottir. He says he cannot put his weight behind the Icesave deal as the government is requiring its ministers to do. He does not, however, wish for his actions to destroy the coalition.
Jonasson said after the meeting that although he has resigned as a minister, he will carry on his duties as a Member of Parliament. He is an MP for the Left Green Party, led by Minister of Finance Steingrimur J. Sigfusson.
Jonasson said that despite his resignation from the Cabinet, he hopes the current government remains in power as long as possible and that it will bring the successful resolution of the ongoing Icesave dispute to the very top of its parliamentary agenda. “The whole time, I have felt that the Icesave issue and the survival of this government are separate issues,” he told Visir.is.
Jonasson continued that he has no idea who will take over his ministerial role yet, before reasserting the importance of the Icesave issue: “I had hoped we would continue our work before the summer holiday when this huge issue was being dealt with separately from all other party political matters.”
First rat off a sinking ship?
I think you should read the Visir.is story more carefully. He said: “Ég hef alla tíð litið svo á að Icesave og líf ríkisstjórnarinnar séu tveir aðskildir hlutir,”
Which means “I have always considered Icesave and the life (continuation) of the government as separate issues”.
Correct me if I’m wrong but I have never seen this rationale quoted anywhere: “He blames his decision on dwindling support for the current Social Democrat and Left Green coalition government.” The only reason I have read/heard is that he couldn’t support a government bill regarding Icesave and the Prime minister’s office considered it absolutely neccessay that all minister’s would.
He resigned because of dwindling public support to the government? Since when is this a reason to resign? Public support moves up or down all the time – you can’t give up your responsibilities just because you lost a few percentage points in polls, this is ridiculous. All elected governments start out with a grace period and then lose some popularity as months pass. I think Jonasson wanted to resign for another reason (doesn’t get along well with Sigurdardottir?) and just found an excuse.
Is he against the Icesave guarantee, the Icesave interest rate, or what?…
>Is he against the Icesave guarantee, the Icesave interest rate, or what?…
You’d think I’d have learnt by now, but arrgh, I hate CAPTCHA :) .
Anyway, as I tried to say, as he agreed to the original Althingi Icesave guarantee, we know that he’s happy with the guarantee at that rate as long as Iceland can write off anything over 6% of growth of GDP.
Whether he’d agree to an unlimited low interest loan, only he can say. Not that it appears to be on the table.
>You’d think I’d have learnt by now, but arrgh,
>I hate CAPTCHA :) .
Looks like it’s been removed.
>Anyway, as I tried to say, as he agreed to the
>original Althingi Icesave guarantee, we know that
>he’s happy with the guarantee at that rate as
>long as Iceland can write off anything over 6% of
>growth of GDP.
>
>Whether he’d agree to an unlimited low interest
>loan, only he can say. Not that it appears to be
>on the table.
It’s a pity that we non-Icelanders can’t work out why an Icelandic minister resigned regarding Icesave. So, in the absence if information, I will assume he resigned because he felt the guarantee should extend past 2024 and UK/NL were being unfairly treated by the government he was part of…
>It’s a pity that we non-Icelanders can’t work out why an Icelandic minister resigned regarding Icesave.
From the quote Asdis gives, he does not want to support a modified Icesave agreement where there is no time limit. All government ministers will have to (indeed, most/all members of the government will likely have to).
He believes, erroneously it would appear from what Johanna has said, that the Icesave matter and the survival of the government are not linked.
To Jim:
>>>>Is he against the Icesave guarantee, the Icesave interest rate, or what?…
Ogmundur Jonasson has always been against the IceSave guarantee and was one of the most outspoken four “rebel” Left-Greens. He has stated number of times, that he believes the matter should have been resolved in front of an international court, to determine what exactly the obligations of Iceland should be.
As a member of the cabinet, he very reluctantly voted for the IceSave guarantee after the amendments had been added to it. When the prime minister said last Tuesday, that she would demand unanimous support by her cabinet, for the response to UK/NL, he felt forced to resign.
Ogmundur has stated repeatedly that, that except for the IceSave dispute, he fully supports the government and will not vote against it. The Left-Greens have been out of government basically forever, and now that they are in, they have no intention of leaving. Most likely scenario that would lead the government to collapse, is if Johanna and the Social Democrats break it over IceSave. Everyone knows if this government now fails, it will probably lead to complete political caos, and scuttle any real hope of an IceSave agreement.
There was an interview yesterday at the BBC Radio 4 show “The World at One” with Ogmundur Jonasson, Mark Todd MP, and Ossur Skarphedinsson (foreign minister), where they discuss these issues in detail. The IceSave part starts after about 5 minutes.
http://www.bbc.co.uk/iplayer/console/b00mvd4g
Bjarni – Thanks for the background on Ogmundur’s views.
“Everyone knows if this government now fails, it will probably lead to complete political caos, and scuttle any real hope of an IceSave agreement”
Only anarchists may relish temporary political chaos but, without it, I cannot see how an acceptable agreement on Icesave could be negotiated. When stuck in a narrow cul de sac, it’s necessary to first reverse the car out, before taking another route. A new government could start afresh and potentially negotiate a lower interest rate in return for a guarantee past 2024.
To Jim,
>>>>Only anarchists may relish temporary political chaos but, without it, I cannot see how an acceptable agreement on Icesave could be negotiated.
The main hindrance would be that there are no other political parties that would support the IceSave agreement based on current terms. Social Democrats will support almost any agreement, while the Left-Greens are split on the issue.
Both the Independence party and the Progressive party want the whole agreement renegotiated, with very different terms. So if the current government cannot do it, no one can (unless UK/Netherlands are willing to lower their demands).
Bjarni – So, the only real decision left is for the UK/NL governments to eventually conclude that further negotiation is futile and then submit legal complaints for resolution via the courts. In which case, the sooner the better for everyone – except the current coalition government…
>Both the Independence party and the Progressive party want the whole agreement renegotiated, with very different terms.
That’s what they say in opposition. What they say in government might be very different though.
To Bromley86:
>>>>That’s what they say in opposition. What they say in government might be very different though.
Thats always true when you are dealing with politicians, it certainly was true for the Left-Greens that were against IceSave before they joined the government :-)
Both the Independence party and the Progressive party have a new (younger) leadership, that does not yet have a strong power base within their respective parties, against the “old” guard.
This is especially noticeable within the Independence party where many supporters of David Oddsson are clearly still around, making sure the new leader Bjarni Benediktsson does not go too far off the reservation.
The Independence party has (correctly) received much of the blame for the terrible situation Iceland currently finds itself in, as it has been in power nonstop for over 20 years.
Being solidly against the IceSave agreement has allowed them, in some ways, to start repairing their reputation somewhat in the eyes of the voters and their poll numbers are now slowly going back up.
Sigmundur Davíð Gunnlaugsson, the new leader of the Progressive party, is probably one of the most vocal opponent of the current IceSave agreement. He is actually a great speaker, a firebrand that has repeatedly warned against the current IceSave guarantee agreement.
The problem for the Progressives, is that it is still basically an old-school party that often is its own worst enemy, spending more effort on fighting each other rather than the opposition. They have been regaining popularity in the polls, as the current government looses support.
In both parties, it would be almost impossible, in my opinion, for the new leadership to suddenly change their minds and start supporting the original IceSave agreement.
To Jim:
>>>>So, the only real decision left is for the UK/NL governments to eventually conclude that further negotiation is futile and then submit legal complaints for resolution via the courts. In which case, the sooner the better for everyone – except the current coalition government…
Basically yes, so long as one of the following does not happen before:
a) Johanna and the Social Democrats somehow manage to beat the remaining “rebel” Left-Greens into submission.
b) The UK/NL goverments ends up accepting the IceSave guarantee with the amendments
c) Current negotiations somehow leads to a “new” solution that is acceptable to everyone.
To add, Guðfríður Lilja Grétarsdóttir, another “rebel” Left-Green was on “Silfur Egils” today, a weekly talk show, that has played an instrumental role in the aftermath of the crash.
http://dagskra.ruv.is/sjonvarpid/4472536/2009/10/04/
There she stated that the government accepted the current IceSave agreement “blind”, except for Ögmundur Jónasson, which now has been “run out of the government” (her words). She further added that Althingi will have to review any further outcome of the negotiations, without any pre-conditions, a clear shot at Johanna.
“a) Johanna and the Social Democrats somehow manage to beat the remaining “rebel” Left-Greens into submission.”
I guess a 5% chance.
“b) The UK/NL goverments ends up accepting the IceSave guarantee with the amendments”
Less than a 1% chance.
“c) Current negotiations somehow leads to a “new” solution that is acceptable to everyone.”
I guess a 5% chance.
So, a 90% chance it’ll go to court?…
To Jim:
>>>>So, a 90% chance it’ll go to court?…
About right, but I would maybe give a few percent more to c). Even if the current negotiations fail, which is likely, they will probably try few more times, since it is clearly in everybody’s interest to settle this through negotiations.
Bjarni said:
“About right, but I would maybe give a few percent more to c). Even if the current negotiations fail, which is likely, they will probably try few more times, since it is clearly in everybody’s interest to settle this through negotiations.”
What would that achieve? Is there any court available that hasn’t already ruled on the matter? The EU best (only) option would be to seize Icelandic assets for the non-payment of debt. There is more than enough to cover it isn’t there? such as the Icelandic pension funds and the assets of the banks.
>The EU best (only) option would be to seize Icelandic assets for the non-payment of debt. There is more than enough to cover it isn’t there? such as the Icelandic pension funds and the assets of the banks.
Not sure that the EU (or indeed any individual government) could legally do this; isn’t that what the waiving of sovereign imunity was all about?
They could kick Iceland out of EEA/EFTA.
To Peter – London:
>>>>The EU best (only) option would be to seize Icelandic assets for the non-payment of debt.
And exactly what international laws are you suggesting EU could use to justify this action? Please provide exact references and quotes from the law texts.
Remember, Iceland is a sovereign country, so its assets are protected from being being seized just like that. EU, like everyone else, has to act according to international laws.
Peter.
Have you seen Chinese military parade recently? :-)
I just came across some idiotic ramblings on this topic:
http://www.icestat.com/index.php/newsarticles/217-politicalrisk2.pdf
Educated Icelanders apparently think “the Icesave affair is the exact same thing” as the whaling issue. Perhaps they’re laying grounds for an insanity plea when Icesave goes to court…
Jim,
I do have my doubts about the ‘education’of this guy. My bet is faculty of economics, university of Reykjavik.
A reality check would not harm certain people
Bjarni said:
“And exactly what international laws are you suggesting EU could use to justify this action? Please provide exact references and quotes from the law texts.”
You must be perfectly aware that the UK’s ‘anti-Terror’ legislation used against Iceland could be used in this situation. Anything that is against the economic interest of the UK can be seized/frozen.
Besides that, freezing another countries assets is a common occurrence. Icelanders seem to think that they hold all the cards when it comes to robbing/ripping off other countries – that simply isn’t the case.
To Peter – London:
>>>>You must be perfectly aware that the UK’s ‘anti-Terror’ legislation used against Iceland could be used in this situation. Anything that is against the economic interest of the UK can be seized/frozen.
Well, it would show once and for all the true color of UK government, as a bully. Thinking more about this though, UK using these kind of tactics, would maybe not be such a bad thing. Early on in the negotiations, Iceland actually offered UK to just take all the Landsbanki UK assets as payment for IceSave. But UK refused this offer, since they wanted Iceland to pay more.
If the UK government now changes their mind and wants to take the Landsbanki assets through a freezing order, because they could not get the outcome they wanted through negotations, then so be it. In the end, UK will only be able to freeze assets that are actually physically located in UK. And, of course, Iceland would then consider itself free of any further obligations with UK regarding IceSave.
You may think you are bigger and stronger, and therefore you can bully Iceland, but you will never break us!
It not bullying to recover stolen goods from a thief, especially a country who used violence against the UK to defend its assets in the past.
“And, of course, Iceland would then consider itself free of any further obligations with UK regarding IceSave. ”
A debt can only be forgiven by the lender.
“In the end, UK will only be able to freeze assets that are actually physically located in UK. ”
This is between the EU and the Iceland, not just the UK.
Iceland has broken signed EFTA agreements and failed to abide by the arbitration. Courts all over the world would probably allow freezing of Icelandic assets.
Besides, the majority of Icelandic assets are in the UK.
“Well, it would show once and for all the true color of UK government, as a bully.”
Yes, but how should one deal with a country that reneges on its obligations? When a country’s government agrees one thing, only for its parliament to subsequently reject it? Who should you negotiate with – who has authority? So, if it behaves like a child without responsibility or authority, then spank it when it’s naughty!
Crys of “bully” have served Iceland well in the past, but that was when they were able to use their strategic position as leverage.
Ultimately, countries do little that they do not expect to benefit them. Was Iceland being “fair” when it, a tiny nation of 300k (less then presumably) laid claim to a massive area of water? Is it being “fair” when it tries to claim more of the Hatton/Rockall area than Britain & Ireland combined? No, it is not, it is just trying to secure the best outcome for its people.
I doubt that it’s worth the UK harming its image (insert chuckle here) by stepping outside the bounds of “good manners” and siezing assets. Far better to let it go to court, especially now the threat to EU financial systems has lessened. That doesn’t mean that there is any benefit to the UK in easing up on applying pressure as and where it can, just as I doubt we’ll see Icelandic politicians managing to go a week or so without mentioning the hurt of being labelled as terrorists :) .
To Peter – London:
>>>>Besides, the majority of Icelandic assets are in the UK.
Exactly which assets are you referring to? Landsbanki or the others banks? Most assets in UK were actually held by Kaupthing as loans to their customers.
If UK again started using the anti-terrorist laws to freeze assets of other companies, including Kaupthing, I am pretty sure their bankruptcy claimants, which are mostly foreign banks, would not be too pleased.
To Jim:
>>>>Yes, but how should one deal with a country that reneges on its obligations? When a country’s government agrees one thing, only for its parliament to subsequently reject it? Who should you negotiate with – who has authority?
What can I say. They were being both incredibly stupid and incompetent, and the UK/Dutch negotiators naturally took advantage of it. The biggest mistake was trying to keep the agreement terms secret. Both sides, really thought the parliament would simply accept the agreement without actually reading it first.
And they are still doing the same mistake. The three governments are still doing things in secret, while applying pressure on Althingi. There are now 3-4 Left-Greens on record, that they will not accept any “changes” to the laws, without full open discussion in parliament first.
So you could say, the ultimate negotiation authority lies with the parliament, which refuses to yield to the pressure.
Please note though, all of the “rebels” have stated, they are not necessarily against a reasonable IceSave agreement, just this particular agreement has terms that are simply unacceptable. If those terms are fixed, then it will probably pass without problems.
To Bromley86:
>>>>No, it is not, it is just trying to secure the best outcome for its people.
That is what every government should always do. We just have serious doubt about ours. :-)
>>>>Far better to let it go to court, especially now the threat to EU financial systems has lessened.
No problems with that either. It is what we always wanted.
>>>>That doesn’t mean that there is any benefit to the UK in easing up on applying pressure as and where it can
As mentioned before, in this case the pressure is probably counter-productive and can possibly lead to UK/Netherlands getting less, not more.
BTW, according to RUV news today, there might already be majority in the parliament for reconsidering the IMF agreement. Several Left-Green MP’s have now voiced strong opinions against it, as the loans will probably never arrive, and in their view, this is actually causing more damage than good. We might be having turkey for dinner after all… :-)
“there might already be majority in the parliament for reconsidering the IMF agreement”
This is getting surreal. Iceland seems focussed on self-destruction. University economics departments will be offering whole courses on Icelandomics.
“reconsidering the IMF agreement”
http://www.bloomberg.com/apps/news?pid=20601085&sid=a0fK81aLdyIw
To Jim:
>>>>This is getting surreal. Iceland seems focussed on self-destruction.
The thinking is, if IMF is not going to pay the loans anyway, what is the reason for staying in the program? As mentioned before, people in Iceland are getting fed up and don’t like being bullied around any longer.