The British ambassador to Iceland told an American colleague over a month ago that the British government was considering taking action to stop Iceland’s Icesave referendum.
This comes from a confidential document from the American embassy in Reykjavik which has been leaked on the Wikileaks website. The document to Washington also contains details of the Icelandic government’s request for American support on the Icesave issue.
The document also details efforts by the British ambassador to persuade Norway to take responsibility for Icesave, the details of which were discussed with the American embassy.
The confidential memo was written by Sam Watson, who is heading up the American embassy while the long wait for a new ambassador continues. The memo is marked confidential and not for public release and is dated 13th January – a week after the Icelandic president sent the Icesave Bill to a national referendum.
Sam Watson writes about meetings he had with Icelandic government representatives and with the British ambassador, Ian Whiting. Whiting is reported to have said that the British government was, even at that time, looking into courses of action which would negate the referendum, which is widely expected to result in a ‘no’ vote if allowed to go ahead.
Whiting told Watson that one option was for the Norwegians to take on Icesave, thereby pleasing everybody involved: the British and Dutch would get their money right away, Norway would be able to prove its professed willingness to lend to Iceland and Iceland could pay Norway back under terms it was happy with.
Watson also documents his meetings with Icelandic authorities who asked for American support. He responded that America is neutral on the issue and has no official position – an argument the Icelandic side saw as simply standing back and allowing the bullying to continue.
Bullying eh?
Is that what thieves call it when you demand they repay the stolen money?
Has it occurred to Icelanders that nobody is willing to help them becuase a) they are not trustworthy and b) the self pitying victim mentality is repulsive c) they are as guilty as hell.
Link to the full document provided by Axel:
http://wikileaks.org/file/us-watson1-2010.txt
Worth a read. Assuming that you have no personal stake in it, it’s actually very funny.
And still no U. S. Ambassador in Iceland after Grimsson’s insulting behavior toward the last one ….
“Assuming that you have no personal stake in it, it’s actually very funny.”
Its rather sad and pathetic.
None of the political powers want to be in power or to have a referendum. There is the unstable head of State who is going to bring down the elected government.
The Norwegians obviously don’t want to lend to the Icelanders either.
Iceland is going to be set back 30 years. Its doomed… at least they get to vote for it.
“And still no U. S. Ambassador in Iceland after Grimsson’s insulting behavior toward the last one ….”
I doubt the reson is this falcon medal incident, this former US ambassador didnt deserve a medal anyway,
we withdrew our support to the Iraq invasion, and saved Bobby Fisher from rottin in a US prison, they extreamly pi**ed over that, one reason could be support to the Brits,
who knows what the US Gov is thinking, personaly i dont care.
And still no U. S. Ambassador in Iceland after Grimsson’s insulting behavior toward the last one ….
Possibly the case, but over on IWR Don in Seattle has given an internal US political reason for the delay:
http://icelandweatherreport.com/2010/02/classified-icesave-document-leaked-from-us-embassy.html
one reason could be support to the Brits
Chosing to remain outside of a conflict, by definition, means that you are not supporting one side or another.
But, anyway, welcome to the world of Realpolitik. Got an army? Valuable trade partner? Or was Iceland instead a persistent pain-in-the-arse ally?
@ Bromley — Don’s wrong.
@ Bromley — Don’s wrong. The successor Ambassador’s name was announced and sent to the Senate, then withdrawn after the Grimsson incident. THe U.S. is in no hurry to step into this mess with another Ambassador.
I am amazed and appalled at the behavior of your Icelandic people. If your American bank went into default, you can be damn sure that our FDIC would be paying you and you would be screaming bloody murder if the American Government did not pay you back. What is wrong with you people? Look up FDIC. Also, if your American deposits went in the hopper and the US Government said Sorry Icelanders, we only protect US Citizens, you can be rest assured that the US would be CRUCIFIED in the Euro Press. Deadbeats!
@Christianne
It’s worse than that. Just before Lansbanki went down, it swept liquid funds to accounts belonging to Icelanders so that no Icelander lost any money. That was clear discrimination based on nationality, which is illegal under EU law. Hence the anti-terrorist legislation. A hundred years ago, Britain would have sent gunships.
@jimbo
Fortunately these days we don’t send in gunboats any more. We’ve learned to send negotiating teams instead. A considerable step forward.
I wonder which party leaked this document, and for what reason. Britain ratcheting up the diplomatic pressure before coming in with an improved offer (coming soon according to the latest story in IceNews)?
The referendum is likely to give a “no” vote, provoke a constitutional crisis in Iceland and delay any settlement. Not in British interests. Hence the effort to get a settlement.
>Britain would have sent gunships.
They are presently fully committed – heading for the Falklands Jimbo!:)
>Britain would have sent gunships.
They are needed im the Falklands at the moment Jimbo. Oil is more important than a modicum of debt & fish :)
To Christianne:
I can guarantee you, if the whole banking system in US suffered a crash and went under, the US government would be doing exactly the same as Iceland, simply because there would be no other option. Adjusting for size, the corresponding number for FDIC would be 4 Trillion dollars! (Total deposits in the States are about $5 Trillion).
Do you really think that FDIC could pay out that kind of money to the depositors?
According to their own reports the FDIC has already run out of money, with the about 100 relatively small banks they have guaranteed so far:
http://www.fdic.gov/news/board/Sept29no1.pdf
http://www.bloomberg.com/apps/news?pid=20601087&sid=aidlDq7Z4Yyk
Lets hope there will not be any large bank failure in the US, as it is already very clear that FDIC could never be able to cover their deposits.
To Jimbo (original Jim):
This is just utter nonsense. Do you have any documentation that backs up your claim that Landsbanki “swept liquid funds to accounts belonging to Icelanders so that no Icelander lost any money”?
And even if this was true, it is standard practice in all bankruptcy proceedings for the liquidators to reverse any transactions or transfers, that hurt the rights or recoveries of other claimants.
Anyone that believes that their rights were violated by Landsbanki or the Icelandic government, can lodge a claim with the EFTA Surveillance Authority (ESA). In fact in the last ruling by ESA they specifically stated that they had not received such a claim, so they were not able to rule on it yet:
“As your clients are not depositors, this letter does not deal with the compatibility under EEA law of the difference in treatment, due to the Icelandic emergency measures between domestic deposits and deposits held in branches of Icelandic banks in other EEA States.”
http://www.forsaetisraduneyti.is/media/frettir/Bradabirgdanidurstada_ESA.pdf
Bjarni
“Lets hope there will not be any large bank failure in the US, as it is already very clear that FDIC could never be able to cover their deposits.”
You are forgetting that the Icelandic government covered ALL Icelandic depositors, but decided to exclude those with out a Icelandic address.I suppose it helped that the foreign depositors effectively bailed out Icelandic depositor, but that the Icelandic concept of fairness – “Fair to us and screw you”.
“In fact in the last ruling by ESA they specifically stated that they had not received such a claim, so they were not able to rule on it yet:”
I don’t know the exact current situation, but there were some depositors trying to sue for the discriminatory treatment by Iceland. Of course, the EFTA ruled that Icesave depositors had to be repaid BECAUSE of the discriminatory treatment.
So in a way you are right, Iceland were stopped from discriminating by the EFTA, so there isn’t any complaints about discrimination.
However – Icelanders are not waiting to be repaid their deposits back from the Icelandic Depositors scheme are they?
We have already covered this subject. If UK/NL depositors would have been alright with keeping their deposits in Icelandic kronas and put under SEVERE restrictions on how much and when they could take out those deposits, I am sure this could have been worked out with our government. Please note that even if you had an account in foreign currency in Iceland, you were ONLY allowed to withdraw from it in Icelandic kronas. Those restrictions are still in effect.
This is EXACTLY the guarantee that the Icelandic depositors received, so it would have been fair to offer the same deal with all the foreign depositors. I am just not sure they would have liked it so much.
As for the EFTA ruling you are referring to (“Icesave depositors had to be repaid, because of the discriminatory treatment”), I have not seen any information about this. As you are known for sometimes making up rulings, arbitrations, and other facts to make your case, please provide exact URL that shows this ruling and quotes from it that back your statement.
“This is EXACTLY the guarantee that the Icelandic depositors received, so it would have been fair to offer the same deal with all the foreign depositors. I am just not sure they would have liked it so much.”
Thats not the who story is it? as part of the process they also guaranteed the exchange rate of of those Krona’s for icelandic citizens – Icelandic based customers were allowed to pay for goods with Krona’s. Overseas depositors would have to fly to Iceland to spend a currency that is not valid currency elsewhere on the planet.
Nice argument, but depositors were not even OFFERED this option.
Icelandic depositors were given complete protection – in their own currency and non-Icelandic depositors were given … nothing.
Indeed, there is absolutely no reason the depositors should have been given anything but the currency they deposited in.
As for those Icelandic depositors who held non-ISK funds – they are a tiny percent and it has no relevance on the basic facts – Icelanders were give very special treatment.
True enough Bjarni, if the foreign based, foreign currency depositers had to endure the same restrictions as the Icelandic based depositer they would be far from content.
My foreign currency account in Iceland, means an account opened with foreign currency (Eur $ or £) is faced with the normal Icelandic restrictions, I can withdraw but only receive the equivalent in IsKr based on the exchange rate of the day. I can not receive back what I deposited in the form of foreign currency. In order to buy foreign currency I am subject to the emergency currency restriction of Iceland.
The foreign based depositers would not tolerate being treated the same as what Icelandic depositers endure.
>Nice argument, but depositors were not even OFFERED this option.
Before Icelandic government of time could get to that.. Darling was cornerd on BBC break fast time news and did decide to guarantee all IceSave deposits.
And at same time took a nice chunk of money in Landsbanki London branch via the UK anti-terroist law.
A pot of money that has been growing every day since then and now is just under GBP 1 billion in size — but does not pay interest to those deposiors or creditors..+
>Icelandic depositors were given complete protection – in their own currency and non-Icelandic depositors were given … nothing.
See above Peter.
+http://www.icenews.is/index.php/2010/02/10/legal-reports-on-icesave-cost-iceland-more-than-predicted/#comment-114069 ( pot of this frozen money is just under GBP 1 billions or USD 1.6 billion or EUR 1.1 billion )
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=28304&ew_0_a_id=357653
“A pot of money that has been growing every day since then and now is just under GBP 1 billion in size — but does not pay interest to those deposiors or creditors..+”
Irrelevant, the BoE is the normal location for funds such as this and its nothing to do with the depositors protection scheme which Iceland was supposed to pay many months ago.
Certainly allow Iceland access to anything that isn’t tied down would be very stupid given the criminality and untrustworthiness of its ruling class.
The Finacial Times editorial 27th Feb is revealing “the wrath of the Icelandic public raises the prospect of citizens elsewhere refusing to pay for public debts seen as someone else’s fault…” Really the biggest fear that governments have is that citizens are starting to understand the great ‘con-trick’ that is ‘the free market’, people are starting to understand that they have been taken for fools by the banks and in Iceland they are saying ‘no more!!!’. Here in Ireland fools that we are we are allowing the government to pack all the bad bank loans into a veichle calld The National Assets Management Agency’ (NAMA)…essentially asking teh ordinary taxpayer to pay for reckless lending into a catstrophic property bubble….there are however rumblings on the streets…watch this space.
Turns out it was the British that leaked this document as a part of a PR stunt that went up in smoke, they have now asked for a
“secret meeting”
http://mbl.is/mm/frettir/innlent/2010/02/27/leynifundur_um_icesave/