President of Iceland, Olafur Ragnar Grimsson, has announced his intention to reject the new Icesave Bill which was passed by parliament just before the New Year. It is his intention to send the law to a national referendum as soon as possible.
Under Icelandic law, the President’s decision means that the law will go into force as the government planned; but crucially that it will be withdrawn again in the event of the Icelandic public voting ‘no’, whenever the referendum goes ahead.
The only other time the Icelandic President has chosen not to sign a bill into law, the government then decided to withdraw it altogether instead of sending to a national vote. The cabinet is meeting at the moment to discuss the implications of the President’s decision and what to do next.
It was widely thought that Grimsson would accept the law and political commentators remain split on what the actual consequences will be now that he has decided the opposite.
An end to IMF cooperation with Iceland, an end to the EFTA agreement, the break up of the government and even trade sanctions are among possible consequences; but there could equally be no serious consequences.
A response is expected from British and Dutch authorities, probably later today.
LOL!!!
Good for you, Mr. President. Whatever happens the people can feel their voice was heard. And if it makes UK and NL work a little harder to me a little more reasonable, then even better.
At last a President with ears and ‘balls’ who has made a decision based on what the majority of Icelanders want.
I only wish Ólafur had been our Prime Minister before we invaded Iraq!
Good for you, Mr. President. Whatever happens the people can feel their voice was heard. And if it makes UK and NL work a little harder to be a little more reasonable, then even better.
>The cabinet is meeting at the moment to discuss the implications of the President’s decision and what to do next.
Resign.
But they are unlikely to break coalition.
Steingrímur J. desperately wants to keep in power ( Left-Greens ) and will obviously do any thing to prevent the Red-Green coalition failing including going against his principles that he was elected on.
Perfect !! Otherwise a whole generation of the country had to pay for what a few foolish privat bankers did.
Olafur made a wise decision!
Good analysis of what can happen next here from Bjarni :
http://www.icenews.is/index.php/2010/01/04/icesave-decision-expected-tomorrow/comment-page-1/#comment-108520
Bottom line is that assuming they do not break the Red-Green coalition ( likely they will hang on by they traitorous finger nails ) the government it has :
> two options, either withdraw the new laws (in which case the previous laws from August come back into force), or let them go to a national referendum.
Law from August are the IceSave ” deal ” amended so that it does not push Iceland into obvious sovereign default with in a few years because of the IceSave 5.5% interest payments+.
So we will now see if UK and Holland do see sense or not. It is highly likely that referndum will mean this specific law does get slapped down with 70% + against majority.
Bear in mind that this is about this specific law, not the concept of paying for IceSave which most Icelander would agree there should be paid — but not this ” deal ” that UK and Holland is trying to force on us.
+Read up to date explanation of that also by Bjarni :
http://www.icenews.is/index.php/2010/01/02/world-watching-iceland’s-president-grimsson/#comment-108426
Now the decision goes to the Icelandic people, which is the democratic way to resolve this issue. Its them after all, that will be paying for the Icesave guarantee.
Its important to remember that the laws are still in effect and will continue to be until the national referendum. If the laws are then voted out, the earlier Icesave guarantee laws that were passed last August, are still in effect.
In those laws, Iceland accepted the responsibility to pay for Icesave, but did so with certain conditions, that are necessary for the guarantee to come into effect.
President Grimsson you will be the hero for generations! Thank You. Wish we had a minister with those guts in Sweden.
As Bjarni did say yesterday night :
>Just to remind everyone, the decision.. by the President is not about vetoing the bill. If he declines to sign the law, it will go to a referendum that will determine the outcome.
>If the laws are rejected, the previous laws passed last August by the parliament are still valid, and they still provide for paying the IceSave guarantee, just on different terms.
Seems like the right thing to do. Otherwise pretty much everyone with a bit of skill would eventually have fled the island to seek their fortune elsewhere. At least there is a bit of hope down this path although it will initially be rough. Good luck, and congratulations on the “cojones” of your president.
Next, deal with the bankers in a way that would have made your saga writing ancestors proud.
Get ready for some stinking muck raking innacurrate journalism coverage particulalrtly in the UK.
Already Sky News has the completely false head line :
” BREAKING NEWS 11:32am UK, Tuesday January 05, 2010
Iceland Refuses To Repay Britain £2.3bn “
Iceland shows it is not a reliable, honest partner and not a civilized country. I hope the EU will not admit them and start a trade boycott and freeze all Icelandic assets abroad. The UK and Dutch money was very welcome in Iceland to blow up their asset bubble until 2008, and the Icelanders had a very good life with foreign money during those days, now it is time to pay back.
What can the EU do? at this point I’d expect the them to wait, after all, the repayments are not due to start for years.
If the deal is rejected, there could renegotiate for better or worse terms. Alternatively, I presume assets could be immediately seized – does Iceland have more than enough overseas assets to cover the debt?
One thing is for sure, Iceland no longer has any credibility as a country, its creditworthiness is questionable if government promises can be overturned on a public vote. Every loan will require a referendum – who wants to lend to a state on those terms?
Just goes to show that the British Government did the right thing when it seized the pirates’ assets. Time to cut all lifelines and watch what happens next.
Just a shame the Icelanders havent decided to also string up the bankers who got them into this mess but then again would you shop your brother or cousin?
>Iceland shows it is not a reliable, honest partner and not a civilized country.
I would say the exact opposite is true — that by the IceSave ” deal ” that UK ( followed by Holland ) has tried to force down our thoats they do show to the world that they are a bully and just want to crush us completely and kick us when we are already down.
A civilized country does not make its tax payer take on obligation that will cause bancrupcy of nation with in a few years, without asking them directly first.
( It is perverse that Steingrímur J. was elected exactly on the opposite of what he has now done in office
—did try again to try and push through the original IceSave deal even though other member parliment did ammend it up to the law that was passed in August accepting the IceSave guarantee.
He is a traitor to his supporters and those that did vote for him and give him his mandate at April 2009 elections.
When the governemnt is this out of touch ( and traitorous to its own voters ) is it any surprise that democracy is demanded by them ?
>I hope the EU will not admit them and start a trade boycott and freeze all Icelandic assets abroad.
Icelanders dont wnat to become part of the EU after seeing how over this whole IceSave matter the EU commission ( and lesser degree the member state ) does treat them.
If UK and Holland want to put in trade sanctions against us — go ahead. Make your selves look like the bully and rapacious kicker of those who are down and see how this is perceived around the world.
As I have said before the world is a big place and Iceland can make its free trade deals it wants with any country now. Something it cant do as part of the EU.
How can Iceland be accepted back into the community of nations if your President vetoes your nation’s obligation to repay its sovereign debt to Britain and Holland? And isn’t this man the same President who lectured the UK and US in 2005 to follow the Icelandic financial model? I kept my money in Icesave until the very end as I believed in the sovereign guarantee of your govt. When it collapsed I stood to loose £15K until Chancellor Darling stepped in to meet the obligations on which Iceland had defaulted.I think he should now go down to Manchester airport and seize the next Icelandair 757 that lands and hold it until your govt repays its debts.
To Fishy:
>>>>Already Sky News has the completely false head line … Iceland Refuses To Repay Britain £2.3bn
I tried to add very courteous comment to the Sky News site to point out the mistake in their headline. They seem to have responded by removing all the comments for that news item, including earlier comments that had been placed by other people.
Guess they are not really as committed to receiving comments on their web site as IceNews is :-)
Fisy, you forget that most Icelanders benefitted hugely from the foreign money inflows until October 2008. You all had a very, very good life based on an unsustainable economic model. I feel very sorry for you, but it is time to pay back and adjust your living standards to a more realistic level.
The deal with the UK and the Netherlands is very reasonable as Iceland will be given a long, long time to repay its debt. So your comment about UK/Holland “trying to crush us completely” and “kick us when we are already down” is nonsensical.
Hey annoyedofmanchester, read before you post. The fact that Iceland needs to repay the debt to the UK and Hollands is been accepted by the Icelandic government and most of its citizens. What should be rejected (and I´m glad for president Grimsson decision) is the terms of the repayment as established in the last agreement. You should pay your credit card debt, but you should not go homeless or hungry to do it right?
To annoyedofmanchester:
>>>>How can Iceland be accepted back into the community of nations if your President vetoes your nation’s obligation to repay its sovereign debt to Britain and Holland?
How about reading first what the President actually decided, before you make assumptions that are so clearly errorneous.
http://www.forseti.is/media/PDF/10_01_05_declaration_w_sign.pdf
First, the president did NOT “veto” the laws, he decided instead to put them forward to a national referendum, as is specified in the Icelandic constitution.
Second, Iceland has already committed to pay for the IceSave guarantee when it passed the earlier laws last August. The real dispute is what the actual economic terms will be on the repayment and whether the Icelandic bankruptcy laws will be applied correctly.
If you browse through the previous comment threads here on IceNews.is you will find a lot of discussion on the relevant topics, which will allow you to form your opinion based on actual facts, rather than just being annoyed.
Iceland is now ours. When can we move in ???
Fishy:
“I would say the exact opposite is true — that by the IceSave ” deal ” that UK ( followed by Holland ) has tried to force down our thoats they do show to the world that they are a bully and just want to crush us completely and kick us when we are already down.”
Nobody is forcing Iceland to accept the loan, please feel free to get the loan elsewhere and repay the UK immediately. Please dictate the loan agreement with your other lender, they will no doubt be overjoyed to give you the money on your terms.
You admit that Iceland has to pay the money back, but the fact is only the UK and NL are willing to enter into this loan agreement because you took the money already – on false premise.
@Gatoloco
What condition of repayment is so terrible that the agreement should be rejected?
I’m incredulous at those rejoicing at this decision. I have news for them. A democracy entails accepting responsibility for your government’s decisions.
Maybe we should have a referrendum in the UK as to whether we should have invaded Iraq. If the answer was “no” (which it would be) then the threat of terrorism will vanish. Pah! Stuff and nonsense.
Of course I have sympathy with Icelanders who face a tough future paying a lot more tax than they would have done had they not gone on such a binge of consumerism and leveraging. We are in a similar situation in the UK, albeit not quite so parlous as that in Iceland. Perhaps we should have let RBS collapse and say “tough” to the millions of foreign investors who would have lost their investments.
Sticking two fingers (or one, depending on your custom :) ) up at UK and NL may seem like fun, but the repercussions are unknown in their severity and impact. Dreams of a “coalition of vagabonds” with Ireland and Greece are laughable. Neither of those two countries have defaulted. Yet.
If Icelanders are confident they can prosper with a worthless currency and not an ally in the world, then good luck to them. In which case my sympathy evaporates.
Marc, you should stop hat nonsense about most Icelanders hugely benefiting from foreign assets. If you would actually live here you would notice only ‘smell’ of cash without actually seeing it. Extremely small fracture of population (we are mainly talking about individuals here) really had it all.
And don’t even dare calling that deal ‘reasonable’. Unreasonableness of it was why current bill was vetoed. Icelanders are willing to pay ‘their’ debts (even knowing what they are paying for others crime) but not on a such devastating conditions!
You want your money back? Talk to those who is responsible for it. Btw, you have better chances with that, cause most of the fu..rs are residents of UK now.
>Alternatively, I presume assets could be immediately seized – does Iceland have more than enough overseas assets to cover the debt?
In your ” I made it up ” world maybe. But not in the real world rest of us live in.
But of course as an expert in international relations and law I am sure you can post the specific clauses of the agreements or accepted international law that does permit this.
( Our govenrment in August as ammended by our parliament did NOT — you notice — sign the IceSave ” deal ” to make it possible for the UK and Holland do do that siezing as they did add in the IceSave deal. )
>One thing is for sure, Iceland no longer has any credibility as a country,
This Red-Green government does not. And sadly it does currently sit in the government seats.
> [Iceland] creditworthiness is questionable if government promises can be overturned on a public vote. Every loan will require a referendum – who wants to lend to a state on those terms?
Icelandic state’s creditworthiness is mainly about how much debt burden it does carry in next years to come.
IceSave 5.5% ” deal ” because of this interest will almost certainly ensure that debt burden will sink country into sovereign default.
Despite jellyfish without backbones sitting in current Icelandic government seats our parliament did pass amendments in end August 2009 that did make even this 5.5% on reasonable payment terms that would not sink the country.
UK and Holland did not accept it as clearly they do want sovereign default for Iceland. It is ridiculous to think that taking on IceSave ” deal ” at 5.5% interest without yearly caps is going to do any thing * good * for Iceland’s credit rating.
( UK and Holland governemnts know this yet they continue to push the deal back at us.
If they did care about actually collecting on this debt they would have accepted the main conditions of August 2009 bill that was passed accepting IceSave state guarantee. )
@Fisy said: “”… that UK ( followed by Holland ) has tried to force down our thoats they do show to the world that they are a bully and just want to crush us completely and kick us when we are already down.”"
Fisy don’t blame UK or the Dutch. It would be the same if you had to pay-back the Canada or even the Sweeden.
@Ian “”How can Iceland be accepted back into the community of nations if your President vetoes your nation’s obligation to repay its sovereign debt”"
well, Icelanders have a point here. Why they should pay so dearly for other’s faults? (Iceland’s bankers and UK/Dutch investors)
In my opinion all these investors sicking high interest rates should just lose their money. And if UK and Dutch wanted to pay them back they should do it from their budgets or the EU budget.
I hope Iceland to resist the blackmail but It will be very hard.
Marc :
>The deal with the UK and the Netherlands is very reasonable as Iceland will be given a long, long time to repay its debt.
You do not know any thing about the details of the IceSave ” deal ” do you ?
Please go away and read this. Then come back and post :
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/#comment-83787
http://www.icenews.is/index.php/2009/06/21/protests-in-iceland/#comment-82896
http://www.icenews.is/index.php/2010/01/02/world-watching-iceland’s-president-grimsson/#comment-108426
A patriotic decision: his People suffers.
And, a decision with a very expensive price.
Will be benevolent London and Brussels? Waiting asteroids … or pies!
//////////////////////////////////
“”The cabinet is meeting at the moment to discuss the implications of the President’s decision and what to do next.”"
Fisy said:
“Resign.
But they are unlikely to break coalition.
Steingrímur J. desperately wants to keep in power ( Left-Greens ) and will obviously do any thing to prevent the Red-Green coalition failing including going against his principles that he was elected on.”
Yes, resign! So the Mafia – your mafia -, the blue communist regime can govern Iceland two decades again!
Has not obviously done any thing to prevent the Independency Party in power including going against its PRINCIPLES that they were elected on??? They destroyed Iceland; they were accomplices, an interested party: how many crimes could be imputed? Infinites!
What surprises me is that fact that none of the people of island seem to realize that the only reason people in the netherlands put money on the icesave bank was because of the guarantee of the money (the first 20k) by the islandic government.
To avoid loss in trust in the banking in the netherlands and possible further damage, the dutch government lended the money to island to pay when the bank collapsed..
Now suddenly a law or even a referendum is required to actually pay the money back. What kind of country is island? Are you really surprised that most people in the netherlands say that island can’t be trusted and don’t want Island in the EU, withing the euro zone or receiving any IMF help..
And for the record: NL/UK’s no is enough to block that.
Note that the fact that islandic supervision over the bank failed (that was as part of the trade agreements islandic responsibility), is now paid by dutch government and therefor tax payers. Not the people having the money on the iceland accounts, but the tax payers.. Doesn’t sound fair to me….
Good for you Iceland. The private citizens of a country should not be made to pay for the mismanagement of a private firm (yes, a bank is a private undertaking). And where were the regulators in Holland and the UK when Icesave set up shop? Greed obscures thinking
I have great sympathy with the Icelanders on this one. It is clear that the Icelandic state is obligated to pay the money back. But the Icelanders themselves are not at fault here. The whole world has been pushed to the brink of bankruptcy by the crazy anglo-saxon capitalist system. It is not clear if the UK itself will remain solvent in the medium term. Icelanders bought into this go-get-it capitalist system and became temporarily very wealthy as a result. But it was all built on debt and lies from the banks. I think there are fairer ways for the UK and the Netherlands to deal with this situation. Making a generation of ordinary people poor is not the way.
Dear Icelanders,
This is a hazardous situation you are all in and I hope you all come out well.
I seem to misunderstand some things So I want to ask you all here:
First of all –> the only thing rejected by your prime minister is the way the loan should be payed back ? right?
Second of all–> The Dutch and UK lend Iceland money to repay a small amount to all the ppl from UK and Holland that had finances (with a maximum of 100.000k) on the iceland bank (note only ppl not businesses.
third one–> How will the IMF react now that there is a dispute about the icesave deals. Can you still lend money from the IMF if you say no to this deal?
Fourth–> How will the other countries look up on lending money to your country?
Fifth–> I wish you all the luck and best wishes for 2010 hopefully a crisis free year!
Hans Sørensen writes: “And where were the regulators in Holland and the UK when Icesave set up shop?”
You obviously have no clue that the UK and Dutch regulators, under EU and EEA (which Iceland, UK and the Netherlands all signed) could NOT stop Landsbanki to enter the UK/NL markets. When UK and Dutch central bankers talked to their Icelandic colleagues to express their concerns, they were sent away by the Icelanders……
So it is clearly Iceland’s responsibility to solve this – they created the problem and should now solve it and pay back the loans.
To those complaining about the 5.5% interest. You do realize that current yield on Icelandic bonds is around 7.5 to 8%, right? That means that if Iceland wanted to loan money in the market, they would need to pay that kind of percentage of money. How is 5.5% then not a reasonable deal? Its far less than the market would charge.
In fact, the Iceland central bank put out a loan late december at 7.99%. So, why are you willing to pay nearly 8% for your own bonds, but now refuse to pay 5.5% to the UK?
Read this: http://forseti.is/media/files/05.05.03.Walbrook.Club.pdf
The same Mr Olafur Ragnar Grimsson telling the whole world why Iceland’s economic model is so good….. Note the fifth element on page 4 “my word is my bond” which is extremely laughable in the current circumstances. It may be replaced by: “never trust an Icelander”
President Grimsson is grandstanding — again. He was first a crypto-communist mob-leader, then an avid capitalist when the going was good, now he’s a man of the people! And still no American Ambassador in Reykjavik.
To Rene:
> …the only reason people in the netherlands put money on the icesave bank was because of the guarantee of the money (the first 20k) by the islandic government.
No. People of NL and UK decided to risk their money cause of % on deposits was generally higher than most of the local banks could offer.
> Now suddenly a law or even a referendum is required to actually pay the money back..
You once again mistaking. Icelanders WILL pay back deposits guaranty (2008 bill passed by as..es in parlament by the time). We are not happy about conditions in the ‘deal’ NL and UK forcing us into. Plus dont you think what referendum on such serious matter is a perfect example of functioning democracy?
> ..most people in the netherlands say that island can’t be trusted and don’t want Island in the EU
You honestly think what if IS will accept deal it will suddenly raise its credit ratings ? Wake up please… On the side note Icelanders don’t really want to join EU. Example of Baltic, Balkans and Greece now screams to stay out of that mess.
To Roy (Dutch):
>>>>First of all –> the only thing rejected by your prime minister is the way the loan should be payed back ? right?
There is indeed bit of a misunderstanding here by many. The President (not the prime minister), has now refused to sign the new laws, passed by Althingi just before the new year. This does NOT mean that Iceland is refusing to pay for Icesave, as Iceland has already committed to so with the laws passed passed August.
You are correct, that if the new laws are voted down in the coming national referendum, it will probably affect, HOW the loan is paid back. That will depend on how the third round of the negotiations will go through, if and when that happens (it is clearly in everybody’s best interest to do so, but the political situation will be difficult).
>>>>Second of all–> The Dutch and UK lend Iceland money to repay a small amount to all the ppl from UK and Holland that had finances (with a maximum of 100.000k) on the iceland bank (note only ppl not businesses.
Its actually 20887 Euros that Iceland is commmited pay according to the EC directive. One of the main problem most people in Iceland had with the underlying Icesave guarantee agreement, was that the new laws committed Iceland to pay more than what was required according to the directive (see previous discussions here on Icenews for more details).
To Roy (Dutch):
>>>>third one–> How will the IMF react now that there is a dispute about the icesave deals. Can you still lend money from the IMF if you say no to this deal?
It is likely that the IMF program will now be delayed further, as the Nordic countries will almost certainly delay their loans further.
>>>>Fourth–> How will the other countries look up on lending money to your country?
Probably very negatively, until this matter is fully resolved.
>>>>Fifth–> I wish you all the luck and best wishes for 2010 hopefully a crisis free year!
Thanks, we will probably need it :-) Best wishes to you.
I would like to put the Icesave situation into simple language for the investors in Icesave and anybody else to understand.
The president of Iceland rejecting the Icesave Bill does not mean that Iceland refuses to pay it’s debts. It just means that these particular terms of payment will go to a referendum. So let’s not get too excited just yet. Now, let us look at the Icesave disaster from the Icelandic people’s perspective.
When the people of the Britain and the Netherlands deposited their hard earned money in Icesave they assumed that Icesave was backed by the government of Iceland. It was not. They simply did not do their homework. At the time, most if not all banks in Iceland were operating as a private company like any other business there.
Now, did the governments of the Britain and Netherlands also assume that Icesave was backed by the government of Iceland? I believe that must have been the case. This is clearly negligence on their part. After all, they allowed Icesave to do business in their countries. Are they not just as responsible as Iceland? Of course they are. Like 33.3% as responsible.
So the Icelandic people are naturally upset with the fact that the governments of Britain and Netherlands are not sharing the burden. They expect the people of Iceland, less than three hundred thousand people to accept the responsibly to pay the debt of a private bankrupt company that was operating in the jurisdiction of two foreign countries.
petros (from Greece) said:
“well, Icelanders have a point here. Why they should pay so dearly for other’s faults? (Iceland’s bankers and UK/Dutch investors)”
Firstly, the fault was entirely down to the Icelandic banking regulator to police their banking system why was well known to be unsustainable. They also lied to the Dutch regulator in the amount of deposits they took in Holland.
Depositors are not investors and they were, explicitly guaranteed by the Icelandic state. Remember both investors and depositors in Iceland were treated differently an d given preferential treatment – which is both unfair and illegal.
lol great. Maybe if Gordon Brown had grown a brain before acting all up trying to be the leader he can never be, then the situation would be different.
Dear Britain, it is time to wake up now, you are not a colonial power anymore (though you act like one). Maybe the world should put you on the international terrorist list.
@George
You are incorrect. The banks in Iceland were indeed backed by the Icelandic government, as evidenced by the fact that the Icelandic government repaid Icelandic depositholders for their losses. By doing so, the Icelandic government accepted the principle that they indeed were liable for losses of these private banks/deposits.
Why should the Icelandic government be allowed to discriminate against other Europeans, in direct violation of EEA-regulations that forbid such discrimination?
And how many icelanders there are is pretty much irrelevant. The Icelandic government guaranteed the deposits, without any kind of condition or limiting factor (except for the 20k euro maximum).
Iam a British citizen writing from the UK, and I urge Icelanders to vote no to this debt slavery. Do not trust the IMF and definately do not trust Gordon Brown. The UK plans to defraud its creditors via inflation, repaying debts with devalued currency. Thats the difference between the Iceland leadership and ours. Yours seem reasonably honest, ours are psychotic liars. Stand firm! Do not be bullied!
George wrote :
>So the Icelandic people are naturally upset with the fact that the governments of Britain and Netherlands are not sharing the burden.
That is not true as UK and NL taxpayer are already sharing burden because they governments did decide to guarantee depositors above the EUR 20,887 required by the Directive 94/19/EC deposit law of EU.
This was not done out of any love for they own depositors or to help Icelander.
It was done in stead because Ireland did suddenly guarantee all its deposits to EUR 100,000 and the other EU nations had to do it to other wise all that money would have flowed out of they banks in general into Irish banks.
In UK case things were so bad that Darling and Brown did in Iceland case guarantee all monies for individuals in IceSave.
It is important to understand this background to situation.
Under EU directive Iceland did have 5 months to pay back the money up to EUR 20,887 but instead after only a few days this money was paid back on they behalf by UK and Holland to depositors.
Again this was done not out of love for Icelanders ( or even the depositors ) but to prevent collapse of UK and Holland banking systems and all money going out to Ireland, Asia, etc.
http://www.thisismoney.co.uk/news/article.html?in_article_id=470349&in_page_id=1
“Britain was ‘three hours from going bust’
Glen Owen, Mail on Sunday
25 January 2009, 9:07am
Britain was just three hours away from going bust last year after a secret run on the banks, one of Gordon Brown’s Ministers revealed yesterday.
City Minister Paul Myners disclosed that on Friday, 10 October the country was ‘very close’ to a complete banking collapse after ‘major depositors’ attempted to withdraw their money en masse. ”
So we are left with this situation were this money was paid out without consulting Iceland government or our deposit guarantee fund ( TIF ) and now since then we are trying to come to arrangement with UK and Holland about paying back that money.
And instead of being reasonsable they instead are trying to make us pay this 5.5% interest uncapped against our economny. 3.5% would have been reasonable.
5.5% interest just will kill our ability to pay back buy 2016 because of all the other debts to pay — even if as expected IceSave bank Landsbanki does give back 70-80% from loans coming in from Icelandic and UK based companies etc.
Bjarni links I posted above do explain that in detail.
And yet this is exactly what happened when it looked like the Icesave agreement was going through:
“Standard & Poor’s Ratings Services said today that it has revised its outlook on the Republic of Iceland’s sovereign ratings to stable from negative . . . The outlook revision is based on the successful passage through the Icelandic parliament on Dec. 30, 2009, of legislation securing a sovereign guarantee”
http://imarketnews.com/node/6580
And look what happens when you tell creditors to bugger off:
http://www.marketwatch.com/story/fitch-cuts-icelands-rating-to-junk-status-2010-01-05
The ratings agencies do not use any criteria for their scoring. They are either paid by the issuer as in the case of AAA subprime mortgages in the US or as in the case of Greece and Moodys, ordered to give a better rating by the ECB under threat of legislation.
By the way Greece will default.
There are clearly lot of new people following this news, and commenting on IceNews, which clearly makes the discussion interesting.
Icesave has been under heavy discussion here at IceNews (over 50 news items with 1000+ comments) at regular intervals ever since last summer, when the original deal was made. At many times, the discussion has been very substantive and educational, and much more fact-based than the regular news or blogs that are out there.
Here is a collected list of the main IceNews news items along with how many comments they generated.
http://www.icenews.is/index.php/2010/01/04/icesave-decision-expected-tomorrow/ (14)
http://www.icenews.is/index.php/2010/01/04/icelandic-president-under-pressure-for-icesave-decision/ (19)
http://www.icenews.is/index.php/2010/01/02/world-watching-iceland%E2%80%99s-president-grimsson/ (55)
http://www.icenews.is/index.php/2009/12/31/icesave-goes-to-iceland-president-for-final-decision/ (29)
http://www.icenews.is/index.php/2009/12/30/the-icelandic-parliament-althingi-says-yes-to-icesave/ (43)
http://www.icenews.is/index.php/2009/12/30/uproar-in-icelands-parliament-over-allegedly-suppressed-icesave-documents/ (11)
http://www.icenews.is/index.php/2009/12/29/icesave-debate-paused-progress-expected-today/ (5)
http://www.icenews.is/index.php/2009/12/28/third-and-final-icesave-debate-begins/ (17)
http://www.icenews.is/index.php/2009/12/23/icesave-passes-into-final-debate-session/ (11)
http://www.icenews.is/index.php/2009/12/21/british-lawyers-say-current-icesave-deal-as-good-as-it-gets/ (17)
http://www.icenews.is/index.php/2009/12/19/majority-in-iceland-want-to-reject-icesave-bill/ (29)
http://www.icenews.is/index.php/2009/10/18/icesave-negotiations-concluded-outcome-presented/ (17)
http://www.icenews.is/index.php/2009/10/18/icesave-this-is-as-acceptable-as-it-getts-for-the-icelandic-nation/ (25)
http://www.icenews.is/index.php/2009/10/18/the-new-icesave-agreement-does-not-mean-more-burden/ (16)
http://www.icenews.is/index.php/2009/10/18/new-icesave-agreement-announced/ (2)
http://www.icenews.is/index.php/2009/10/12/icesave-time-running-out-for-icelandic-government/ (57)
http://www.icenews.is/index.php/2009/10/05/icesave-continues-to-shadow-iceland-loan-talks/ (13)
http://www.icenews.is/index.php/2009/10/04/will-russia-loan-iceland-money/ (17)
http://www.icenews.is/index.php/2009/10/04/former-minister-to-bbc-iceland-being-blackmailed-over-icesave/ (8)
http://www.icenews.is/index.php/2009/10/01/norway-to-save-iceland-from-icesave-woes/ (31)
http://www.icenews.is/index.php/2009/09/30/iceland-health-minister-resigns/ (35)
http://www.icenews.is/index.php/2009/09/29/pm-iceland-cannot-wait-much-longer-for-imf-payout/ (38)
http://www.icenews.is/index.php/2009/09/28/british-and-dutch-stance-on-icesave-hardening/ (148)
http://www.icenews.is/index.php/2009/09/24/david-oddsson-becomes-newspaper-editor/ (51)
http://www.icenews.is/index.php/2009/09/19/icesave-discussion-returns-home-british-and-dutch-ideas-on-table-in-reykjavik/ (58)
http://www.icenews.is/index.php/2009/09/14/glitnir-islandsbanki-creditors-given-choice/ (23)
http://www.icenews.is/index.php/2009/09/07/joseph-stiglitz-in-iceland-talking-economy/ (32)
http://www.icenews.is/index.php/2009/09/02/icelandic-president-signs-icesave-deal/ (24)
http://www.icenews.is/index.php/2009/08/28/press-release-parliament-approves-state-guarantee-for-icesave-loans/ (8)
http://www.icenews.is/index.php/2009/08/27/protesters-gather-in-front-of-parliament-today-against-icesave-deal/ (35)
http://www.icenews.is/index.php/2009/08/25/icesave-bill-enters-last-round-of-talks-in-iceland/ (20)
http://www.icenews.is/index.php/2009/08/22/the-icelandic-parliament-says-yes-to-the-icesave-deal/ (20)
http://www.icenews.is/index.php/2009/08/17/ambassadors-briefed-on-icesave-deal/ (28)
http://www.icenews.is/index.php/2009/08/15/icesave-deal-takes-step-towards-completion/ (4)
http://www.icenews.is/index.php/2009/08/14/iceland-pm-defends-parliament%E2%80%99s-icesave-misgivings/ (50)
http://www.icenews.is/index.php/2009/08/07/icesave-deal-still-controversial-in-iceland-and-still-not-green-lighted/ (15)
http://www.icenews.is/index.php/2009/08/04/eva-joly-criticises-europe-over-iceland-debt/ (19)
http://www.icenews.is/index.php/2009/08/02/iceland-national-debt-figures-released/ (10)
http://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/ (207)
http://www.icenews.is/index.php/2009/07/13/the-icelandic-government-is-not-responsible-for-icesave/ (31)
http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-%E2%80%9Cthere-is-no-plan-b%E2%80%9D/ (43)
http://www.icenews.is/index.php/2009/06/26/rejecting-icesave-deal-could-be-akin-to-declaring-war/ (111)
http://www.icenews.is/index.php/2009/06/21/protests-in-iceland/ (63)
http://www.icenews.is/index.php/2009/06/16/where-have-all-the-billionaires-gone/ (49)
http://www.icenews.is/index.php/2009/06/09/icelandic-%E2%80%98outvasion-vikings%E2%80%99-took-huge-loans-in-the-uk/ (14)
http://www.icenews.is/index.php/2009/06/08/politicians%E2%80%99-pride-angers-man-on-street/ (32)
http://www.icenews.is/index.php/2009/06/06/icesave-deal-agreed-%E2%80%93-final-confirmation-next-week/ (44)
http://www.icenews.is/index.php/2009/05/25/icesave-deal-tantalisingly-close-iceland-finance-minister/ (17)
http://www.icenews.is/index.php/2009/05/19/iceland’s-kaupthing-bank-talking-tough-over-debtors/ (7)
There are clearly lot of new people following this news, and commenting on IceNews, which clearly makes the discussion interesting.
Icesave has been under heavy discussion here at IceNews (over 50 news items with 1000+ comments) at regular intervals ever since last summer, when the original deal was made. At many times, the discussion has been very substantive and educational, and much more fact-based than the regular news or blogs that are out there.
Here is a collected list of recent IceNews news items along with how many comments they generated:
http://www.icenews.is/index.php/2010/01/04/icesave-decision-expected-tomorrow/ (14)
http://www.icenews.is/index.php/2010/01/04/icelandic-president-under-pressure-for-icesave-decision/ (19)
http://www.icenews.is/index.php/2010/01/02/world-watching-iceland%E2%80%99s-president-grimsson/ (55)
http://www.icenews.is/index.php/2009/12/31/icesave-goes-to-iceland-president-for-final-decision/ (29)
I do not want to be grim. Tough it’s for the greed for money a lot of governments go to war. :(
Marc responds to me “You obviously have no clue”. Well, then explain why the UK and NL regulators apparently were powerless to stop Icesave from setting up shop – and now they have the power to hold a sovereign nation up for ransom by threathning to block IMF funding. No one can be powerless and powerfull at the same time.
Believe me, as a U.S. citizen, I fully understand how it feels to be left to pay the tab after the bankers have dined, but I have difficulty separating the “people” of Iceland from their elected government for purposes of accountability.
I am impressed by the process and events that have led to this decision being decided by a public referendum- I wish most of my fellow Americans could be troubled to demand a little democracy now and then…
But that said, (and if I understand correctly the argument is that the repayment of the money advanced by the UK and NL governments is not in question, but rather the terms) it seems naïeve to think that your creditors will negotiate with your interests in mind. They have you by the balls, and everyone knows it. Try renegotiating your foreign-currency mortgage: “Don’t worry- I’ll pay it back, I’d just like to change the terms: extend the repayment by 15 years, lower the rate to below the govt. bond rate, forgive any balance remaining after 15 years, and I reserve the right change the terms at any time”.
I can’t speak for Iceland, and I certainly mean no disrespect. If it were my decision I might also use veto power to compel a referendum- but lofty notions of democracy notwithstanding understand that this may be construed as a politically fuelled negotiating tactic. The amount of money in question is negligible by international standards- that’s not the real issue. If you have the sense that you’re being bullied, taken advantage of when you’re down, that people are trying to own you and your future, you are correct.
Although I regret my tax money was spended by Mr Bos (our finance minister) on some people wishing to make some profit on interest, I think it’s wise that you do not just accept the claim. The interestrate is higher than the rate the Dutch government pays, even higher than the rate Icesave offered in its days…
I think you should have had better checks on your banks, I think we should not have blindly trusted your control system but your bankruptcy wont help.
I really regret the threats by him about the membership of the European Union and the IMF. He’d better try to make a better deal.
ps to Alex
Perhaps the UK will send Mr Bean to attack, but our army is in Afghanistan so if we attack it will not be before 2011. Perhaps this helps you to stop grimming…
>No one can be powerless and powerfull at the same time.
I’ll bite Hans.
It’s not the same time. You’re not comparing like with like. The UK/NL regulators are not involved in the dispute. The UK & NL governments are and, as is often glossed over, they are just as sovereign and just as entitled/required to try to achieve the best for their citizens as the Icelandic one.
BTW, the first statements that I saw regarding the IMF led package, which were out there within hours of the veto, were from Finland and Sweden. Not the UK, NL or IMF. And they both said that the next review was in trouble.
To the people of Iceland…
Do not pay us anything, both your *ankers and ours stuffed both our Nations.
We will just print some more toilet paper, stamped with the Queens head anyway. Look after you and yorn and don’t worry about the UK, we are wirling around the toilet pan anyway.
HI HI ´
A mixed day indeed, people admire the fact that someone in power in this day and age does listen to their people, yet angry that we didnt agree to this draft of the bill.
Im English and have lived in Iceland for nearly 4 yrs.
Everyone here wants to start paying and get the economy going again, but our goverment is slow and stupid like every other country in the world.
I think if we could get a lower interest rate then Iceland would jump at the chance to start paying !
It is the terms, not the fact of not paying that people are objecting too.
@Fisy.You say that Iceland had 5 months to repay the Icesave deposit guarantee and imply the UK govt acted prematurely. The UK govt had to act because it found there was no money in the govt “escrow” account that purported to secure the first Euro20K of our deposits. How could he be sure Iceland would put any money in it in the next 5 months on which he could draw? That 2 days when we knew Iceland had defaulted and before we knew the UK govt was going to reimburse us was worrying for me – and you wanted me to worry for 5 months instead. Cheers mate.
And for all of you who say ordinary Icelanders shouldn’t be paying for the mistakes of your bankers, please remember it was your govts failure to ensure the bank guarantee worked that caused the mess. Like it or not you are all responsible for the sins and omissions of your govt.
annoyedofmanchester did write :
>@Fisy.You say that Iceland had 5 months to repay the Icesave deposit guarantee and imply the UK govt acted prematurely.
( here above I said much more of course which annoyedofmanchester does want to ignore about UK reasons :)
http://www.icenews.is/index.php/2010/01/05/icesave-agreement-rejected-by-icelandic-president/#comment-108749
> The UK govt had to act because it found there was no money in the govt “escrow” account that purported to secure the first Euro20K of our deposits.
Are you refering to the lying Darling did on the October 8th after talking to our then Finance Minister Árni Mathiesen on evening of 7th of October?
http://www.whatdotheyknow.com/request/confirm_that_iceland_did_not_int
The TIF fund ( what you are calling the “escrow” account ) is entirely under control of people in Iceland so only could Darling know of it specific condition he was told about it by Icelanders.
Where did you get this idea of the “escrow” account from you talking about ?
At this time Icelandic government had sent letter specifically making clear they would assist TIF fund in rasing funds to cover it obligations.
At this time Icelandic state was almost debt free with very good credit rating.
Kauthping was still standing.
There was no reason to believe that Iceland would not backup the TIF.
>How could he be sure Iceland would put any money in it in the next 5 months on which he could draw?
Because Icelanders pay they debts. They always have.
And Davið Oddsson government before and Geir Haard government ( of one year ) did make it aim always to pay down the government debt.
>That 2 days when we knew Iceland had defaulted and before we knew the UK govt was going to reimburse us was worrying for me – and you wanted me to worry for 5 months instead. Cheers mate.
Iceland had not defaulted. Landsbanki was taken into receiver ship.
Icelandic government at time was dealing with securing its own depositors first just as was done in UK and other countries.
Every thing went horribly bad for Iceland state and it bank after the next day that Darling-Brown did put Landsbanki , Iceland Central Bank and Gonverment on Terrorist list same as Al Qaida, Taliban, Iran, North Korea, etc. http://lisa.indefence.is/News/News/~/NewsId/13
and then did take our biggest bank and largest company into receivership ( Kautphing )
by taking its UK subsidary Kauthphing Singer and Friedlander into receivership and give its deposits to ING for NO good reason.
( Brumely will of course post shrilly about that but it is a fact .)
Of course once that was done things got very difficult. But all this came form Darling actions, NOT from the actions or lack of actions of Icelandic government of the time.
Just keep in mind, we are only 300.000 here and we are facing tax increases up to 50% from 1/1/2010, and we need a better deal on interests to keep up with these depts. Also British people, keep in mind, that the biggest owner of Landsbanki and Icesave, is no longer a resident in Iceland. We get the blame, while he is residented in London, walking free and living in luxury!
Here following lead of Bjarni above ( hope its okay Bjarni ) I will post links to most recent post so you can find them :
http://www.icenews.is/index.php/2010/01/09/skarphedinsson-and-moratinos-icesave-has-no-impact-on-eus-treatment-of-application/ ( 4 )
* http://www.icenews.is/index.php/2010/01/09/eva-joly-to-dutch-media-netherlands-being-arrogant/ ( 11 )
http://www.icenews.is/index.php/2010/01/08/joint-nordic-statement-on-iceland-loans-next-week/ ( 9 )
* http://www.icenews.is/index.php/2010/01/08/government-bill-for-a-national-referendum-on-icesave-legislation/ — policy advise for clueless Jóhanna Sigurðardóttir and Steingrímur J.
http://www.icenews.is/index.php/2010/01/08/lithuania-follows-latvian-lead-by-expressing-support-for-iceland/ ( 21 )
http://www.icenews.is/index.php/2010/01/08/british-fishing-towns-fear-iceland-politics-will-affect-jobs/ ( 12 )
http://www.icenews.is/index.php/2010/01/08/iceland-finance-minister-on-nordic-charm-tour/ ( 2 )
http://www.icenews.is/index.php/2010/01/07/icesave-should-not-sour-nordic-relations-iceland-fm/ ( 16 )
* http://www.icenews.is/index.php/2010/01/07/latvian-fm-wades-into-icesave-argument/ ( 29 ) — welcome to propaganda posting alias ‘ west ‘ of other posters here..
* http://www.icenews.is/index.php/2010/01/07/the-emergence-of-icesave-empathy-for-iceland-in-uk-media/ ( 46 ) — another meaty issues facts thread
* http://www.icenews.is/index.php/2010/01/07/bbc-newsnight-interview-with-the-icelandic-president/ ( 33 ) — Ólafur Ragnar gets Paxoed. Program features poor research by Economics Editor Paul Mason and his team — be ashamed Paui, very ashamed
* http://www.icenews.is/index.php/2010/01/06/iceland-and-uk-ministers-to-hold-meeting-this-evening/ ( 27 ) — at last one of the many obviously UK government working posters here comes clean and comes out publicly
* http://www.icenews.is/index.php/2010/01/06/icesave-misunderstanding-in-the-foreign-media/ ( 50 )
* http://www.icenews.is/index.php/2010/01/06/iceland-president’s-icesave-decision-drawing-harsh-international-response/ ( 57 )
http://www.icenews.is/index.php/2010/01/06/iceland-fm-declines-india-trip-with-president/ ( 5 ) — Össur Skarphéðinsson acting like a child
* http://www.icenews.is/index.php/2010/01/05/government-iceland-still-committed-to-debt-repayment/ ( 49 )
http://www.icenews.is/index.php/2010/01/05/fitch-lowers-iceland-credit-rating-to-junk/ ( 11 )
http://www.icenews.is/index.php/2010/01/05/business-as-usual-for-icelandic-government-for-now/ ( 25 )
* http://www.icenews.is/index.php/2010/01/05/is-iceland-without-icesave-allies/ ( 56 ) – more meaty facts and discussion
http://www.icenews.is/index.php/2010/01/05/declaration-by-the-president-of-iceland/ ( 4 )
* http://www.icenews.is/index.php/2010/01/05/icesave-agreement-rejected-by-icelandic-president/ ( 65 ) — a particuly juicy thread
Where I put a star * I indicate threads very much worth reading.
>Brumely will of course post shrilly
That’s right Fisy. You’re the best!
BTW, any comment on the Kaupthing case? No?
>We get the blame, while he is residented in London, walking free and living in luxury!
So charge him already. If the UK government doesn’t extradite him them you have a fair point.
The Iceland citizens should not be expected to pay the debts incurred by the private bankers. Keep demanding justice, Icelanders! Vote No!