Sunday 7 March 2010


Bit late I know, but the vote in Iceland not to pay back the UK and The Netherlands I find interesting. There seem to be many arguments to say why should they pay us back? When it was as much our  (EU) rules as their's.

However, I seem to remember there was this country once, which bankrupted itself fighting a war to save Western Civilization. At the end of the war it had to take out huge loans from its former allies to try and survive and as a result there was rationing for a long time; Longer even that the defeated and occupired countries it had defeated. Eventually, over 60 yeas later every penny was paid back with interest.

The people of Iceland feel wronged and robber by their own, which is also true, but it is disengneous to blame johnny foreigner for this.


Old BE said...

You have been reading the Gordon Brown script without criticism.

Isn't one of the main criticisms that the interest rate and rate of repayment are so large as to make it virtually impossible for Iceland to recover itself and therefore make the repayment more feasible?

And was not the remaining non-crunched Icelandic bank broken by UK terrorism laws?

The Icelanders have said "no" to this particular agreement. To argue that this means that they don't want to repay the debt at all is a classic Brownist straw man.

Anonymous said...

I seem to remember said country actually bankrupted itself maintaining an empire that made no sense and then immediately after the war spending all the cash it had along with the loans it got and the Marshall aid building a welfare state it couldn't afford.


Anonymous said...

In any case it wasn't a war to save Western Civilisation, it was a war to defend Poland, which brought that country half a century of dictatorship, and created the wartime conditions under which the Nazis were able to get away with mass atrocities.

Peter Whale said...

If Tesco's offer a super interest rate, takes in billions from abroad and then looses it. Why would I be asked to pay it back as a taxpayer?

Anonymous said...

Mr Anonymous doesn't know his history. The Empire gave a great return on our investment in the war. Indians, Aussies and other colonials fought as well or better than native Brits at lower cost.
It was our supposed allies (USA) who bankrupted us.
The Welfare State had to be implemented because the working class were not prepared to fight for nothing as they had in WW1.
It was in the late 50's that health and welfare costs started ballooning and the reasons for that are many and various.

Ratbag said...

The point surely is that a foreign government (UK and Netherlands) imposed a guarantee on deposits that simply wasn't there. The greedy coucils et al who deposited money with them should have checked the fine print. These deposit were not guaranteed in any way. Caveat depositor....

Steven_L said...

Weren't they limited liability banks? I'm seething and having to stump up for a load of limited liability banks I never owned.

If we'd been given a vote on this, I'd have voted 'no' too.

Anonymous said...

"Voters rejected the bill because ordinary people, farmers and fishermen, taxpayers, doctors, nurses, teachers, are being asked to shoulder through their taxes a burden that was created by irresponsible greedy bankers."

It is interesting that the government of Iceland had already declared the vote of the people as 'obsolete.' One has to wonder when the voters will declare their current government and their representatives as obsolete. One would give them credit for at least allowing a vote on a referendum.

Iceland is a victim of the neo-liberal economic deregulation of the 1990's, in which a few bankers can buy the government, and rack up enormous profits for themselves in Ponzi like leverage, and then attempt to socialize the debt back to the people when their schemes collapse.

Neo-Liberalism is a system of economic thought embracing the efficient markets hypothesis, the inherent good of deregulation and the natural impediment of government regulation, the necessity of free trade and globalization, the supremacy of the corporation over the individual person in the social economy, and supply side economics. It most likely favors a one world currency and consolidation of production into large corporate combinations or 'trusts' under the principle of laissez-faire.

Neo-liberalism may degenerate into crony capitalism, or even corporatism, as its theoretical idealism of perfect rationalism and virtue falters against the reality of human behaviour. In times of financial crisis, for example, neo-liberalism ironically turns to centralized economic planning by allegedly private banks which appropriate public funds and the power of the monetary license to socialize private debts, and, in a strikingly Orwellian twist, eviscerate the discipline of the markets and the individual to preserve their freedom, and the well being of the private corporations. Although now largely repudiated, neo-liberalism has strong roots in the public consciousness, and its adherents hold considerable power in Western governments and among the 'freshwater school' of American economics.

What makes neo-liberalism and neo-conservatism 'neo' or new is their attitude towards the relationship of the individual to the state. Both tend to denigrate and diminish the condition and rights of the inividual as compared to the consideration of the corporate system or the centralized command state.

In the States, the Congress and the President have just ignored the massive protests against their own bank bailouts. The US was able to cloak its own debt assumptions through accounting frauds, claiming that the bailouts were repaid by the banks. The bailouts are wrapped in AIG, Fannie and Freddie, and the Federal Reserve. This is the advantage of owning the currency, the IMF and ratings agencies. And of course your media.

Although Europeans and the markets are looking at the 'PIGS' for the next serious default as the economic hitmen are moving from Iceland to Greece, the real test of globalization in financial markets and the dominant control of the private banks will come in the UK, a sovereign people too proud and strong to go down into feudal servitude and the rule of tyrants easily. Or at least one would hope.

H/T Jesse

Bill Quango MP said...

Rather novel interpretation of WW2 anon.

CU has a Masters in history.
Special subject IIRC was 'the Commonwealth in WW2'

Anonymous said...

I thought rationing was maintained after WWII because so much of our food was being shipped to Germany to feed the poor blighters after 20,000 starved to death in the first winter after the war. Not the any of them ever thanked us mind.

Meanhwile I can see why the Icelanders rejected this vote. They are being asked to pay off a $4.5bn debt at the rate of $15,000 each in order to get their hands on a $5bn loan from the IMF. What kind of deal is that? That is just a debt swap arrangement where the Icelandic people go from not being liable for the debt to being entirely liable and having the IMF then determine the terms of the repayment. I can see why the Icelandic government is so keen to ge this deal sorted - they want to move the demand to repay the debt from the people responsible for the debt (i.e. their mates in finance that no doubt went to the same schools) to the man in the street. Meanwhile, I suspect the Icelandic man-in-the-street has felt for a very long time that it was kind of odd that Icelandic businessmen seem to have found the money to buy British football clubs, but never were asked if it was a wise use of the money.

Responsibility must always fall on the shoulders of those responsible, not on the shoulders of powerless innocent bystanders.

CityUnslicker said...

Just to correct a few points, the icelandic government is not keen on this deal. They welcomed the NO vote to strengthen their bargainig position; which it has done.

I am not really to enamoured with the comments about the people of Iceland not suffering from the bankers. Their jobs, livlihoods and everything were hugeley (and temporarily) improved by the bubble, just like here in the UK. Now it has burst they say no fair, we did not agree to this.

I think this is only partly true. Yes the affairs were too complicated to understand, but they re-elected the Government who brought them false wealth.

Just as we did in the UK.

the thing about anti-terrorism law, whilst true and shocking for both sides, is a total distraction. They are denying the Netherlands their funds too.

Welching on your debt becuase you think it unfair would not be a system on which we could organise a global economy.

if they think what the UK is doing is illegal, well then, take us to court.

Anonymous said...

Your simplistic reply CU, does you ill.

And is light-years away from reality.

Anonymous said...

Semper, hate to break the news to you but the only member of the Empire in 1939 that you mentioned was India. The Aussies, Kiwis, South Africans and Canadians were part of the Commonwealth - as they are now - not colonials. There was net outflow of cash to India and the Middle East.

Also the UK had it's first crisis in 1948 due to the NHS bankrupting the country. It was when glasses stopped being free and upset mr Bevan no end.


CityUnslicker said...

That is not really an answer anon.

Decrying neo-liberalism (apologies is that is a different anon) whic you define as a kind of communism was hard for me to comprehend.

Democracies aI think are at a difficult point. POliticians promise the earth and cannot deliver and now are blaming foreigners; Icelands, Greece, UK all suffer from this dementia.

The answer is not to placate the electorate with more of the same.

rwendland said...

I'm surprised no one here has mentioned that under the European Economic Area cross-border banking rules that allowed Icelandic banks to hawk their wares in UK/NL, the Icelandic state is legally responsible to provide about €21k per account insurance repayment. They are not legally entitled to walk away from that thru some “pseudo-bankrupcy” approach.

A debt of say €3.5 billion would represent just 167k accounts at the full €21k insurance payment. It would be interesting to know how much of the cash we are after represents this mandatory Icelandic state insurance.

Mermaid of Moorgate said...

Doesn't really matter in the long-run. Iceland will be the first to fall foul of climate change.
Who will be laughing then?