Rejecting Icesave deal could be akin to declaring war

Steingrimur-J-SigfussonIf 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.”

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