Yesterday Iceland failed in its quest to secure a seat on the UN Security Council.* According to The Times, this constitutes a “fresh humiliation” for Iceland on the international stage.
I’m sorry: but when does running for something - whether office, or seat, or anything else - and not making it, constitute “humiliation”? You run for something, give it your best shot, but somebody else is successful … does that mean “humiliation” for you? Are Olympic athletes “humiliated” if they don’t win gold? Will it be a “humiliation” for John McCain if he doesn’t win the US elections?
And what exactly are the instances of previous “humiliation” for Iceland? That our banks crashed? That our currency is in free-fall? Certainly it is upsetting, distressing, particularly for those of us who had nothing to do with creating the mess … but “humiliating”? I don’t feel humiliated. I feel angry, sad, sometimes distraught … but certainly not humiliated. And I hope my fellow countrymen don’t feel that way, either.
The tone of that Times article seems to be yet another manifestation of the over and/or covert Iceland-bashing that suddenly seems to be all the rage. It’s like the schoolyard bullies have found someone to kick around to deflect attention from all the dysfunction at home. Icelanders in other countries are experiencing such ugly instances of discrimination that it verges on persecution. Some of the following have appeared on the news, others are stories that are circulating that nonetheless are credible enough that the Consumer Spokesman has seen reason to investigate them:
Example: An Icelandic student doing his master’s in engineering in Karlsruhe, Germany, was kicked out of an apartment he rented with two female students. They had advertised for a tidy roommate; however, one of the women, who was British, said she would not share an apartment with an Icelander. He was told to pack up and move out.
Example: Two Icelandic women were in a shop in Denmark. The clerk was providing fine service until they started speaking in Icelandic. He then asked if that was Icelandic they were speaking, and when they said yes, he told them to leave - they didn’t serve Icelanders. On the way out they stopped to look at an item by the door, at which the clerk walked up to them, took the item from them, looked into their eyes and said, “we don’t serve Icelanders.”
Example: Icelanders got up to make a presentation at a conference in Rome. Everyone applauded except for a group of people at the back, who booed. They turned out to be Brits.
Example: an Icelander went to use a credit card in a shop in Denmark. The clerk spit on the card and gave it back without making the transaction.
Example: A credit card belonging to an Icelander was cut in two by a shop clerk in Denmark.
I can’t vouch for the validity of the above stories, but if some of the ugly comments that have appeared on this website and elsewhere on the web are anything to go by, I’d say they are perfectly credible.
Iceland is an easy target right now - a small nation dealing with massive difficulties that moreover stands alone and is not in a very good position to defend itself.
Would Gordon Brown have invoked anti-terrorist legislation to freeze the assets of, say, German or French bank? Why did the failing US banks not get a similar treatment as Landsbanki in the UK?
For most of last week, ALL bank transactions to and from Iceland were blocked in the UK. That meant Icelandic students couldn’t transfer money from home, Icelandic importers [including food importers] couldn’t pay their suppliers, Icelandic exporters couldn’t get paid for their goods. And - why? Because UK banks didn’t “trust” Icelandic banks. Because all of a sudden, Icelanders are personae non gratae. This country was economically bullied, shut out, until yesterday, when the British government sent a letter out instructing the banks to open for transactions to Iceland again. And this is by a nation that is supposed to be a friendly nation, a NATO ally.
I don’t see what this country has done, what heinous offense has been committed, to warrant the kind of treatment we have observed of late. I just know that the whole thing seems menacing and very, very chilling.
IT’S TURNED COLD
Beautiful sunny day today, but cool. Right now it’s 1°C [34F], sunrise was at 8:28 am, sunset at 5:56 pm.
* This may sound like the proverbial sour grapes to some people, but I don’t know anyone in Iceland who gave a rat’s ass about that Security Council seat, although a lot of people objected to the cost of the campaign. It seemed like a fickle flight of fancy by a few ambitious politicians, and as someone remarked yesterday, “so 2007.”
{ 70 comments… read them below or add one }
I am very sorry to read all this, Alda. Although I live in the UK, I certainly don’t agree with the bullying.
Heh, I think this news about our not getting that seat one of the best piece of news to hit for weeks!
and I know for a fact this thing about the Karlsruhe student, he’s a friend of mine :X
I understand your frustration and anger when hearing such stories. At this point though, these stories, true or not, should be the least of your worries. I think it is high time to prepare for worse times to come and plan on how to get your hands on foreign currency. Besides, on your blog you will be preaching to the converted.
I think this probably sounds harsher than I mean it to be, but I AM serious. All the best.
I’m surprised at the Danish behavior. What the heck did you guys do to the Danes???
This behavior is sad. These times are bringing out the worst and the best in people. Unfortunately, the media only seems concerned with mostly covering the worst. I can relate to some of the treatment, for instance, traveling abroad and being treated badly by people once they realize I am an American (ergo I must have supported Bush and the ridiculous wars, and be totally ignorant and materialistic). Treating people of a country as human punching bags doesn’t solve anything, and karma can be a bad, bad thing.
I would like to point out that students are still unable to transfer money to and from Iceland through international banks, many students will face serious difficulties at the end of this month if this is still unresolved. The stories going around are a) there isn’t enough currency going around so that the banks can allow for serous amounts of money to be transferred, and b) that the UK banks and DK banks are freezing the money- seeing as we are obviously dangerous terrorist.
I had to beg my school to help me out- and I am not getting any straight answers from home.
I know the term starving student- but didn’t expect it to become quite so literal…!
SPRON does not seem to have this trouble! Have used both my debit and credit card here in the UK without any trouble. Have also asked them if it was possible to transfer some money into my UK account and the answer was positive…
So if you are living abroad and get yer money from Iceland, i would quickly open an account with them.
Humiliated?! WTF?? I’m shocked to hear all this.
Thankfully everyone treats us well here in Australia
Sympathy and good will. And we were able to transfer money a few days ago.
Normally we would transfer the money (símsenda) ourselves through our internet banking. Some days ago it was however not possible but we could still withdraw money from an ATM. And then a few days ago we could transfer again, although we had to do it by emailing a request to our bank which then forwarded it to Seðlabankinn for approval.
Shocking stories. There is a huge difference in world view from within and outside Iceland presently, but that does not excuse bad treatment of people. I truly hope that is not going on here, the behaviour of our banks notwithstanding.
Alda - what happened at the demonstration? I’ve been waiting all day to hear!!
Please dont be too sensitive to what the british press write. They always use sensationalist language, and exaggerate things. It gets more readers.
Secondly, in answer to your question about whether the UK would seize the assets of a french or german bank, I think the answer is, yes, if they did what Icesave did. Please dont forget that Icesave/Landesbanki has “lost” the savings of thousands of ordinary people, and also the taxes they paid to local councils, for services like street lighting, rubbish collection etc. If any bank, from any country did that, then, yes, the government would step in and act.
Iceland is not being victimised here.
i am appalled at the awful behavior of these people! they are deflecting the anger at their own governments and their own greed, towards Iceland and it’s people. it makes me want to cry. i like to think the best of people and i guess it sets me up for big disappointment. be strong Alda. there ARE good people out there that still love y’all.
peace
austin, texas
“Would Gordon Brown have invoked anti-terrorist legislation to freeze the assets of, say, German or French bank?”
Under similar circumstances, sure. No doubt about it - you always should think twice before messing with the Brits. Remember the Falklands or the cod war. But then, our governments would never blatantlty violate international treaties and declare in the case of a bank bankruptcy that only domestic savings are guaranteed, sending a message of “screw all foreigners”. Yours did.
“Why did the failing US banks not get a similar treatment as Landsbanki in the UK?”
Because the US either nationalized banks, ensuring the continuance of their operations for ALL customers, or led them go into bankruptcy, like Lehman brothers, in which case all creditors are treated in the same way, regardless their nationality. Islandic politicans wanted to act differently, as evident in the public statements of David Oddsson and the FME: “all domestic deposits are fully guaranteed. Landsbanki´s domestic branches, call centres, cash machines (ATMs) and internet operations will be open for business as usual.”
http://www.fme.is/?PageID=581&NewsID=331
This can’t be misunderstood in any way, it’s business as usual for Icelanders, and tough luck for all others. Only after Gordon Brown reacted quickly on this, and secured Icelandic assets as a collateral for the savings of his countrymen, the official Icelandic position miraculously changed. Honi soit qui mal y pense.
Well, imho, when your own government engages in such blatant discrimination, you aren’t in a strong position to point fingers at others. Not to speak of the strong “Iceland for Icelanders” movement, the widespread chauvinism showing in a recent poll (many Icelanders think that foreign workers should be paid less for the same work) and all those stories about the positive side of the recession being that foreigners will go home now. So, sry, but this looks like you are sitting in a glass house.
One other point, on the widespread opinion that your “friends” should treat you better. You don’t seem to have noticed how unpopular your politicians are in the rest of Europe because of their arrogant behaviour. Just read this sppech by your own president Grimsson and ask yourself if you believe he made any friends with his boasting and ridiculing:
http://www.grapevine.is/Features/ReadArticle/How-to-Succeed-in-modern-business-Olafur-Ragnar-Grimsson-at-the-walbrook-club
So, seriously, sorry, you Icelanders sure are nice people and I would like to visit your country soon, but your politicians and bankers are horrible. Please concentrate on cleaning this pigsty, and don’t fool yourself by blaming foreigners for your troubles, ok?
Not very nice stories!
Yes, and I too want to know about the demonstration yesterday
I wouldn’t use such strong words as Gray, but it’s hard to argue with the basis of what was said. From what I read on the net, the debate in Iceland is very parochial. I believe there is genuine irritation in the UK government at the amount of gung-ho expansionism that went on before it all imploded, which explains some of their lack of patience. Their action was pretty heavy handed, but for whatever reason they definately believed Iceland was not going to meet it’s commitments. It had been reported in the weeks up to the final collapse that Iceland’s banks were busy trying to repatriate assets. What Iceland has to understand is that by taking on the big boys (and rubbing their noses in it somewhat) was a very high risk strategy. Through it’s failure, hospitals, universites, local councils - in the Netherlands as well as UK, are going to have to cut services at a time cash is very tight anyway. There’s bound to be resentment.
The invective being aimed at the UK is not helping, and I don’t believe other EU governments are particularly sympathetic. The UK banks should not be blocking payments, although extreme caution is innevitable and understandable. Goodwill seems in short supply which needs to change, but is unlikely to whilst the war of words continues.
People must make the distinction between the failure of the authrities and the ordinary people. I’m sorry the Brits booed the Icelandic speaker in Italy. No excuse for that. Some thick skins are needed though, as the country’s reputation is not high. The IMF is the only show in town right now, and the government needs to stop dallying and apply as they have a busy time ahead. Ukraine and Hungary are already at the door, and there’s a potential queue behind.
The current policy of managing a different exchange rate internally to the real world value can not be maintained for long. What little trading happened on Friday was at the rate of 275 ISK/1 Euro. Necessary in the short term, but it has implications for money supply and the temptation to print more, which must be avoided at all costs. That is the road to Zimbabwe.
Brown is accused of kicking Iceland in the teeth as a diversion from his own troubles. Frankly, I think the reverse is true. Anger at the UK is a very useful diversionary tactic by the Icelandic government and oficials, all of whom are still in power and have an awful lot of explaining to do.
I understand how people don’t really appreciate Icelanders at the moment. When Iceland froze Landsbanki accounts in the UK, and Mr Haarde said they are not going to pay anything from the compensation scheme, it is very understandable that they try to save what they can.
A lot of people outside Iceland have now a lot of their hard-earned savings frozen in Icelandic banks. I have 10000 euros stuck in Kaupthing, and I don’t know if I’m ever going to see it again.
Oh I see: now Icelanders are responsible for freezing Landsbanki accounts in the UK. It just does not stop, does it?
Please understand: THE BRITISH GOVERNMENT FROZE LANDSBANKI ACCOUNTS IN THE UK. NOT the Icelandic government.
Also: Geir Haarde did NOT say Iceland would not pay anything from the compensation scheme. He said quite the opposite - that Iceland WOULD honour its obligations. WHY does this not penetrate??
I would very much like it to be investigated just where this misconception started. If, as has been suggested, it was to be understood through the words of Doddsson on in a TV interview or in some private conversation between two individuals, what matters is that our PM went to work the very next day to correct it and said that, quite the opposite, Iceland would honour its obligations like any civilized Western nation. I watched him say it myself, live on television.
He MAY have said (this is me filling in the blanks) that he didn’t know exactly how or when it would be paid out - which is completely rational, seeing as the bank’s assets needed to be sold in order to cover those deposits. Negotiations with the Brits ensued, and the end result was the Britain would lend Iceland 100 m pounds or some similar sum to cover those debts until the matter could be resolved.
It’s like people have fixated on some weird misunderstanding or misconception, and nothing that is said can change it. It’s bizarre. This avalanche of anger and negativity and I cannot see that is warranted.
However, if, as has been suggested, Landsbanki was ‘repatriating assets’ then that needs to be investigated. If there has been criminal misconduct then those individuals need to be held accountable - NOT the entire Icelandic nation. We’ve lost money, too. My money is still frozen in a fund, too, and I don’t know what will be left of it when it finally is released. Hey - this is even worse than the Great Depression in 1929. We’re all losing - and the Icelanders are NOT out to screw over the Brits. Much as it may gratify some people to think so.
Alda,
I have been watching this closely, reading your blog daily as always, and I think it’s time to take a step back and breathe. I don’t believe feeding the media machine with stories of abusive behaviour towards Icelanders is helpful and is probably dangerous. This is not the start of a new Eurpoean Apartheid ……..
People are people in what ever nation and, when worked up into a frenzy by a media driven only by ratings, there will always be some who behave in this way. Icelanders are no different either - as a Brit in Iceland the sarcastic comments such as “do we owe you any money ??? ” from workmates becomes tiresome - but I am sure there are equally people here in the country who would easily take the next step given enough prodding. Do we REALLY want to go down this road? Do you REALLY want to feed this monster ? We are all suffering or going to suffer the same; right now I have family who have money stuck in IceSave and I cannot get my rent paid or get my salary because the company cannot transfer money in to Iceland so let’s not start claiming global Icelandic discrimination just yet.
Let’s also remind ourselves of a few facts:-
The laws invoked were NOT terrorism laws but generic law aimed at protecting UK interests. This has been pointed out multiple times here in this blog and yet still the “terrorist” label is run out - this was media spin which sold papers and upped ratings.
The Icelandic government did act to protect its own people first (understandably) and the UK governement also did act protect its own people first (equally understandably).
The media have spun the story to create national tension because it sells.
I found your analysis of why the banks have frozen transfers particularly disturbing “…Because UK banks didn’t “trust” Icelandic banks. Because all of a sudden, Icelanders are personae non gratae. ” This is simply not true - it is about exchange rates ONLY. Until an agreement or solution can be found for the exchange rate then a bank simply does not know what a Krona is worth in another currency - and as I said this applies to money coming IN as well as out. This is not about “Icelanders being personae non gratae” but is all about the Krona being an unknown quantity right now.
We must focus on the fact that the people to blame are not the Icelandic or British or Danish population but the small group of bankers and politicians who created this situation - or perhaps every person in the western world who took that 100% mortgage calculated on 5 x their salary on a house they couldn’t possibly afford if the interest rates were normal.
Trev has it about right - the polticians on both sides are stoking the anger of the populations to divert attention from their own failings and we must not let it happen. There are intolerant bigots in every country on the planet and we should not feed their hunger for targets.
The way out of this is not pandering to nationalistic bigotry but to find ways to strengthen the relationships on a level outside the realm of bankers and politicians - personal relationships to help trade and understanding.
Sæl Alda
I am still not able to send money from Iceland to pay bills my company owes in other countries. I do not know when I will be allowed to do this. I do not know whether I’ll be allowed to use the foreign currency accounts I have again. I do not know how safe or secure the funds I have in these accounts are. My creditors abroad are seething and several are unlikely to renew contracts. I’m afraid when this sort of thing happens it’s not difficult to see why Icelanders are being treated as Alda describes. In fact the examples she quotes are rather mild; I fear things are going to get worse. We must remember that we’ve screwed around with people’s money. Many abroad are describing it as theft. It’s going to be a long time before we are forgiven for that.
In answer to your question about whether the Brits would have done the same to other countries in similar circumstances then the answer is yes.
I discussed this yesterday with some British customers who I know very well and respect. There are some real hardship stories surfacing in the press in Britain — elderly people sinking their life savings in Icesave in order to pay for nursing care and stress related health problems following on from these money worries. There’s no indication when or if ever they’ll get their money back. Already people are predicting premature deaths as a result. Our prime minister’s minimum guarantee is actually a very small amount of the totals involved. Foreign savers feel betrayed by Iceland particularly when they were encouraged to save their money in Icelandic banks by our president.
My British contacts went on to say that the economic damage done to the UK by Iceland is far, far worse than anything Al Qaeda’s managed to do since Sept 11th, and with the likelihood of increased illness from stress and worry it’s probable that the incidence of premature death directly related to the collapse will exceed the terrorist totals as well!
There have been lots of comments on your blog about the culprits for the collapse. There’s a consensus developing that it’s incompetent bankers and greedy entrepreneurs who are to blame. I think this is the symptom rather than the cause. The cause is rather closer to home I’m afraid. It’s lack of control which allowed this to happen. It is our government which should be called to account. It is the Icelandic nation that needs to acknowledge that we elected them; the responsibility is ours.
To sign off in a lighter tone with today’s bonus question.
What is the profession of the Icelandic minister of finance?
Award yourself 10 points if you answered, ‘Vet’.
Honestly, you can’t make this stuff up!
Kv
Birgir
But alda, no matter what was said or wasn’t said by Oddsson or Haarte you have to understand that there was no money behind the intention. Iceland will meet it’s commitment to UK depositors in Icesave only because we have lent Landsbanki GBP100 million to do so. Kaupthing was going to fail, and the UK government knew that if the state couldn’t meet the commitments of Glitnir and Landsbanki, they certainly couldn’t for Kaupthing. That Kaupthing F&S was basically solvent was the main concern, given that the parent was on life support and in desperate need of lquidity. I posted before - the parent sold 37 million of shares in Kaupthing FS (UK) two weeks before the collapse.
The UK government were going to take no chances. Good will intentions from Iceland were meaningless, as they HAD NO CASH nor means of raising any.
I implore the Icelandic people to resist in the xenophobic tsunami against the UK. There are issues for debate, but it’s a sideshow. The situation is as dire as could be imagined. The UK’s money blitz saving our banks is awesome and has leveraged the UK considerably. The figure I read was that it aquaints to GBP3600 per resident. Icelands debt stands at GBP115,000 per resident. That is going to take some manipulating if life is to carry on in anything approaching norm.
The country is not in a strong position, financially or politically. It needs every friend it can get. In this hour of need, to pick a fight with one of it’s strongest allies in both economic and cultural terms is reckless and fruitless. The UK is not seen in that light currently, but it is the case. The UK government acted in the best interests of it’s citizens as was the Icelandic government when Oddsson said they would not meet the debts of their banks as it would bankrupt the country. I watched the Youtube with translation several times and there is no doubt.
The UK is making difficult life even more difficult for Icelanders presently. I wish this weren’t the case. Some appreciation of the reasons why would go a long way. There are glimpses on here that a few folk do understand.
There is going to be legacy of animosity here without a doubt, which is a real shame. I hope British people’s love of Icelandic culture, especially it’s brilliant and unique bands will build a bridge.
You should nationalise Sigur Ros. They must be worth a few bob.
Birgir, if your UK customers brought up the words “Al Qaeda” tell them to shut up and don’t be so ridiculous!
One last point today, showing how another very small nation copes with the problem:
“But if a solution is not found, the Luxembourg and Belgian governments will look for ways to ensure that Kaupthing’s customers receive more than 20,000 euros, the current level of guaranteed bank deposits, the Luxembourg government said in a statement on Friday.”
“In an interview with the Luxemburger Wort newspaper published on Friday, Luxembourg Prime Minister Jean-Claude Juncker said: ‘If people in Belgium got the impression that the Luxembourg government only supports banks that manage the savings of Luxembourgers, that would be a death blow to Luxembourg as a financial centre.’”
http://www.forexfactory.com/news.php?do=news&id=116735
Now, this is a qualified and responsible acting prime minister who inspires international confidence and makes his people proud. What a difference!
Hæ Trev
Telling customers to shut up is never a good idea. At the moment it is an extremely stupid idea for an Icelandic company to do so!
Their point was straightforward. The economic damage caused by the Icelandic collapse exceeds that done through direct terrorism. I don’t have the data to confirm whether this is true or not but suspect it is.
Kind regards
Birgir
It does not matter which politician or bank manager or majority shareholder has said what in the past month. The simple fact of the matter is that if, in all of these stories, you were to replace “Icelandic” with “Arab” or put “Muslim” for “Icelander” there would have been an international outcry. If British “customers” were to doubt their Arab business partner after 9/11 and would no longer use their services, their would be newspaper reports and calls to boycott these “customers” products. No one would dare to cut in 2 the credit card of a muslim out of fear for the media back-lash and the call to arms from human-rights groups. but for some reason, because it is Iceland, people can say the dumbest crap without blinking.
Birgir, I feel for you, but when your contacts tell you this kinda crap reasoning, ask them if they were personally effected by the bankruptcy of these banks. I bet they were not, nor is their health in danger from the worries over the lost money. Ask them if they have stopped hiring or doing business with Arabs after the metro-bombings in London and I give you 100 to 1 that they will be shocked that you even dare mentioning this! Ask them if in the past they did not want anything to do with the Irish, when the IRA ran its terror campaign and they will look at you as though you were the village idiot! But for some strange reason it is perfectly normal to pick on Icelanders and even tell them straight to their face that it is because of their nationality.
I know you called them customers, but since you seem to be owing them money, i would think that maybe they are suppliers? If that is the case, you should change suppliers as fast as you can, when the times are back to normal! and once you have done so, you should explain to your old clients that they are bigots and racists, plain and simple!
Hi Birgir
I collude. I have a small busines too (3 employees). I never tell a customer to shut up, even when it is justified.
But to try and draw a corelation between the loss of UK authorities funds in Icelandic banks with anything Al Quaeda has done or attempted to do is sensationalism gone mad! Mabe not “shut up” but “take a cold shower”.
I truly hope your business survives. I cannot comprehend any reason why a UK customer should jeopardise their relationship with a respected and reliable Icelandic supplier because of the monetary situation. They would be very short sighted if they did.
I wish you all the luck in the word. There’s not a lot about at the moment.
Hello
I’m Canadian from Icelandic descent and sad to say from where I stand it does seem that Iceland is the villain here.
Birgir makes some very good points particularly about the nation having to accept collective responsibility. This isn’t a big story in Canada at the moment but we’ve a tradition here of paying our debts.
The incidents the author describes are puerile and irritating if they happen to you but quite honestly they’re not that serious. Far more serious is the impact on the ordinary Brits who had money in the Icelandic banks. It really isn’t hard to see why there’s anger here.
Come on Iceland, grow up, accept your responsibilities and pay what you owe.
Sally
I’m in my eighties and live in a care home in Scotland. I enjoy using the internet but this is the first time I’ve ever written anything on it. I’ve spent some time this evening trying to find out and understand the situation with Iceland banks.
I sold my home three years ago and opened an Icesave account with the money. I took independent financial advice (we Scots have a reputation of being careful with our money) and clearly remember the agent telling me that Iceland Banks were sound as they were supported by their government and president. I have been using both the money and interest to pay for my care home costs. I can’t look after myself anymore and it’s quite expensive here so now I’m sick with worry about what will happen to me.
The agent told me that maybe I’ll get some money back but it will only be a fraction of what is owed. It’s wicked that this can happen, I think it’s stealing.
I don’t understand enough about what’s happened really but I’m glad Gordon Brown’s done something to at least let me have some of my savings.
I am very concerned about what will happen to me.
Thanks for letting me write. I will read you again when I want to learn about Iceland.
Margaret Fraser
To be brutally honest sally, it’s not the Brits who are going to suffer the most, but those icelandic people who have never had loads of money, but whose jobs are now on the line, as well as their personal wealth. I say that because they never had the choice of putting their money into a high yielding icelandic savings account, no questions asked. Alarms about the creditworthiness of these banks were raised a long time ago, so the responsibility here is at least shared by multiple actors. I do think everyone shoulhd be refunded, but I would find it fair if those putting their money in these high yield high risk accounts were forced to forfeit the ridiculous intrests. There is a lesson in here for many, also for those councils and hospitals chasing high yield regardlessly!
That said, I am still stunned that the icelandic government hasn’t resigned yet. Even if they were beyond any reproach, Iceland faces such challenges at the moment that it is more than just good manners to ask the citizens who should lead them out of this disaster.
Is the opposition even WORSE? Can’t be, surely?
Blaming the people of a country for the failings of their leaders is just unbelievable to me. I might even guess that many people in a majority of countries don’t really like their leaders (I experienced this fully when visiting Africa years back, for example… where people might not like our leaders, in my case in the USA, but they did not blame me for that).
Adolescent behavior from adults is never acceptable. To see it so widespread is sad, very sad. I wish I could believe the reports were untrue. I know enough about human nature to believe the essence is happening, if not the exact details.
Let us hope this insanity passes quickly. We can only hope…
Not to completely digress from the topic at hand, but in reference to your example— if John McCain doesn’t win the elections, I hope it’s humiliating for the Republicans.
Alda,
Bryce, in his post above, gets to the point of the matter. Until Iceland has a viable currency no one, and I mean no one is going to do any transactions with Iceland. The government is surely aware of this yet they take no action and as a result people like Birgir suffer the consequences. Why is this allowed to continue, my guess is:
1. The krona is worth even less now than most expect and making this public will further degrade confidence in the ability of Iceland to make restitution
2. The assets held by the banks are worth way less than anticipated which again degrades confidence in the ability of Iceland to make restitution
3. Governments tend to delay announcing horrible news until they have no choice in the matter, this day is rapidly approaching
As to:
“I don’t see what this country has done, what heinous offense has been committed, to warrant the kind of treatment we have observed of late.”
Iceland has committed a very serious economic offense against the banking systems and citizens of other sovereign nations. Was this intended - surely not, is the average Icelander at fault - again surely not but the fact is government, the citizens that voted for government and speculators have created a truly huge mess and people both in and outside of Iceland are damned mad, worried and scared.
It is a sad situation but until Iceland takes responsibility we will have no friends nor anyone to bail us out (IMF).
Great webside Alda!
rb, I think a woman named Sarah Palin has taken care of the humiliating part for the republicans already
In response to Marc concerning bank interest rates before last week’s meltdown:
Rates available to Icelandic savers in Iceland: Around 15%.
Rates available to savers in Icelandic banks in Britain: less than 6%.
Kristján sums up well in his final three paragraphs.
In response to Margaret Fraser:
Dear Margaret,
I am really and truly sorry for all the distress you are suffering as a result of the incompetent management of Icelandic banks. I am sure you will get something returned to you and I hope very much it will be all you saved with us.
There are those in Iceland who are suffering too and it is to your credit that you are so understanding in your criticism. The way forward, as you have shown, is through dialog and negotiation.
My very best wishes
Birgir
(apologies Alda for a minor hijack)
To Margaret Fraser,
If an agent has recommended you invest your ONLY funds in a single institution where the protection level would have always been many times lower than your funds, then the agent has given you wrong advice and I believe you have claim against him / her in law. Any investment advice by law has to specify the risks and protections. Even British banks accounts today are only protected to £50,000 and so any amount in an account over £50,000 should be money you are willing to lose.
One wonders what the agents commission on this was …….. ?
It looks like Iceland is finished as independent nation. Kaput.
The news is that the government will go the IMF and ask for help in the coming week. The IMF reports that they are willing to lend on a short term basis, without onerous pre-conditions (don’t believe it). That may amount to 10 billion euros short-term, partly to satisfy the debt-service coming due soon and perhaps partly to shore up the central bank and get money and foreign credit going again. So it appears that things will return to “normal” fairly soon, or appear to do so, since currency accounts will no longer be frozen and most likely the euro will be used (and thus no inflation).
The problem is the longer term. England and the other countries will insist that Iceland pay back all bank depositors. That’s 4 billiion pounds in England alone. Iceland could pay that out relatively easily with the IMF money, and the Bank of England loans. The losses incurred by investors in the banks is a different matter, however. If Iceland is held responsible for all English “investment” losses (i.e. difference between the sale of bank assets and the mount due to investors) the amount could be from 30-50 billion. There is no conceivable way Iceland could pay that back in 200 years. Even paying off just the interest on the 10 billion IMF loan will cripple the country. It is up to the new overlords, the American banks and Gordon Brown, to pick off what they like of Iceland’s resources, and when they want it. The IMF will now make all significant decisions about Iceland. Very very sad.
In Australia our government has been telling us that all will be well as long as we keep spending, so they have handed just lots of unearned money (A$10 billion) to pretty much everyone so we can spend up before Christmas. Now an international expert who has a good track record for predicting what will happen around the world due to our recent profligacy has named Australia as the next Iceland. So Alda, you may soon be joined by 20 million Australians. I’m not sure if that is good news!
Thought you might like to know. I’m currently in Malaysia on business, and your demonstration outside Iceland’s central bank even made the TV news here!
Any sackings yet??
WOW this is shocking but being an American living in Iceland, I can say that I have gotten my fair share of sh-t from Icelanders simply for being American. It’s complicated, part jealousy, part politics, and part straight-up Anti-Americanism…. and a few other things thrown in (I’m white btw so racism in the traditional sense does not apply to my case). All I can say is, as former President Clinton used to say, I feel your pain.
Ah ha, somebody in Iceland finally shows a bit of sense. Apparently there was a meeting of 300 lawyers in iceland this weekend(”Lögfræðingaher á landinu á vegum kröfuhafa bankanna..” http://www.visir.is), in which they they recognized that the banks assets might be sold at too low a price, in which case they should try to rescind the sales. This is a slight ray of hope. Iceland’s only chance to survive is to get the maximum value for the banks’ assets, principally by delaying any sales by the banks themselves, the Icelandic government or the british government. Iceland should sue to block any sub market value sales and request in British bankruptcy courts that any sales should be delayed. Iceland should put all the bank assets in bankruptcy courses across Europe and then sue in one country’s court if another country’s courts treat them unfairly. A divide-your-enemies strategy. At the same time they should argue in British bankruptcy courts that any funds given to the Icelandic banks as investments are distinct from funds given to them as deposits, and that Iceland should not be responsible for the investment losses, just as investors were not protected when the American investment bank Lehmann Bros went bankrupt. In the meantime Iceland should spend and borrow as little as possible, even if it means that the domestic economy goes completely in the toilet and many people have to leave. Then, in two years or so, when the matter in resolved in court, Iceland can start to borrow and the economy will recover.
Personally, I don’t think that the Icelanders have the foresight and patience to go along with such a plan (largely because their own leaders who would implement such a plan have shown themselves to be so dishonest, stupid, incompetent and corrupt). They would rather get money right now and go along with the IMF and the British and mortgage the future.
Also I would like to add that I feel this is the UK’s chance at getting back at Iceland for losing The Cod Wars, and having all of the UK high street bought up by Icelanders over the last 10 years. Brits are very nationalistic and this is the result. I remember the UK press coverage of when Baugur would buy up the latest chain of stores, it was always some allusion to “viking raids” in the article. And so it goes….
And I also think certain factions are using this as a chance to get even with the whole Bobby Fischer thing….
About the “losses” suffered by the english –
The money lost in the banks’ collapse did not simply disappear. Rather it has mostly gone into the pockets of wealthy British indiduals and companies. Those who sold their companies and shares to the banks in 2002-2006 made big profits when the Icelandic banks foolishly bought at such high prices. And when the assets are sold in the next year or two, it will probably be for bargain prices to Englishmen, such as that Green fellow. Only a relatively small amount was skimmed off by the Icelanders, maybe 10 billion, and then trickled down into the Icelandic economy.
And now it seems clear that all the English depositors will get their money, it is just a matter of when.
I really don’t know what to say, Alda, but feel I should reach out and say something, even if I feel powerless and unable to offer more than a fraction of comfort. Please take a step back, breathe, go for a run; run wind the wind and shout your rage into the sea. I’d be on a mountaintop doing just that (and might be, by next week…).
And please, please, stop reading the British press. Check the Beeb for news if you must. The so-called “serious” British press makes the tabloid press in my country look positively intelligent.
run with the wind, even.
A couple of thoughts from Sweden. Icelanders are often perceived as arrogant, rude and unpleasant. There’s widespread opinion that deserve all that’s happening to them. A year or two past they ignored 23 European nations when they requested Iceland stop killing whales. It’s not hard to see why Icelanders are so disliked. Now they’ve stolen billions of other peoples money and it seems there’s very little chance of getting it back. I hope that tax payers in other nordic lands don’t bale them.
Just listen to us !!!!!
From V N ” Icelanders are often perceived as arrogant, rude and unpleasant.” - ALL Icelanders are like this ??!! What nationalisitic rubbish.
From Garpur “And when the assets are sold in the next year or two, it will probably be for bargain prices to Englishmen” - what ALL Englishmen will line their pockets - no ONE actually.
Keep it up everyone - we can get that war started yet …..
People are people are peolpe - where-ever you are and there will be bigots, greedy businessmen and incompetent politicians in all places. Focus on them by all means but keep the generalisatios to yourself IMHO.
I think you should be showing more support for the non Icelandic people who have had their lives wrecked by the greed of the Icelandic banks.
I’m pleased Gordon Brown did something positive to prevent even more cash haemorrhaging away.
My father was in Iceland protecting you from the Nazis during the war. He said something to me later which I didn’t understand at the time but makes perfect sense now. ‘Never trust an Icelander’.
You brought this on yourselves. Don’t try blaming others for your mistakes.
Good news for Iceland. You got a 6 billion $ loan from the IMF. Don’t know what the conditions are, but this should give some hope.
Alda,
That sort of journalism in The Times and most of the UK press is why I don’t bother with newspapers anymore. Sensationalist and reactionary. And quite often just plain wrong. Even the BBC website can be misleading with some of its headlines.
As for the freezing of assets that was just using the best tool (but still wrong) for the job. Just made matters worse. I think GB would do it to a French or German bank. Particularly if it sounded good and there was political capital to made out of it.
The Truth, as always, lies somewhere, wounded, in the middle.
(But on a serious note, my mate will be worrying that his beloved West Ham will have to sell their best players….)
To Bryce of Reykjavik: Here, here!
If you ignore the money that never was (overly inflated stock value, presumed value of things like real estate, etc) and deal only with the hard cash that people have put into these banks I have to ask one question. Where is the money?
And it all seems to start with one thing as the single biggest cause, in my opinion. The Iraq war.
There is a lot of fallout all over the planet and lot of opportunistic greed for too many years that has finally burst the bubble. But if not for the Iraq lie we might be in much better shape. It isn’t just about oil, it’s about drugs too but most of all it is about money and who gets it.
Why has Oddsson not yet resigned? - I’ve only just got round to reading St Richard de Portes’ article in the FT last week,
http://www.ft.com/cms/s/0/e17cb5a0-98ce-11dd-ace3-000077b07658.html
and the way he describes it appears that he is personally culpable for a lot of this mess. But that was a week ago. How is he justifying hanging on?
Viking Nemesis: Norway hunts whales, too. And seals. And Swedes, if you close the Systembolag too early on us.
Alda/Icelanders, I think the only thing that bugs Norway about Iceland in all this is that Iceland wants the Russians to help them. We still feel a kinship to what used to be the westernmost part of Norway.
Vikingsson, I too suspect that the cost of the war is part of it, but I haven’t seen any break-down on how.
I am fifty at Christmas. Mrs BW and I are thinking of celebrating by taking the family to Iceland. I spent a couple of weeks thirty years ago doing some work on glaciation on the Eyjafjallajokull glacier, and I have always wanted to come back to Iceland. Hopefully if the recession does not screw everything up we’ll make it. You have a wonderful country and stacks of things going for you, like your renewable technology etc all of which will be more important than a little local difficulty with the banking industry. Anyway we have our own problems without picking on other countries.
The Iraq War? Are you joking? On the western side of the Atlantic, it’s really just this simple: US government fails to regulate an exploding market in securities backed by sub-prime mortgages, thereby creating an opportunity for banks to evade reserve requirements. US and other investment firms go deep on those securities, and the ones who bought the most risky ones load up on credit default swaps as a form of insurance. Other investment entities notice that you can make money off hedging credit defaults swaps on assets that you don’t even own, and go to town. Next thing you know, there are USD62 trillion in unregulated and concealed credit default swaps, throughout the word economy. The US housing market tanks, banks hit a reserve / liquidity crisis, the commercial paper market freezes, hedge funds start selling equity stocks to cover their CDS exposure, and wham bam global credit crisis and stock market melt-down! Rather like Tolstoy’s famous “every unhappy family is unhappy in its own way” comment, local conditions may vary, but that’s how you get started.
The Iraq War, on the other hand, has at most secondary effects on most other countries’ economies. Here in the US, it was our “leadership” who opened this tab, and we’ll be paying for it for some considerable time. But since a a majority (not including me) voted this load of no-hopers into office, that’s what we get.
Alda,
You might be (a little bit) pleased to know that I plan to visit Iceland with my wife next summer. The plan is still in the early stages, but since this is something we’ve always wanted to do, I would say there is a fair chance it will happen. As long as we can get some sun on another holiday next year. Really looking forward to it.
Marc
I don’t believe that the Iraq crisis is a minor blip and I’m not looking for a breakdown because that would be coming from the same people that lied for years to get us in there. For that same reason I’m not believing the dribble they are spewing our way about the economic mess. It is all that and a lot more. The truth may never be known but the effects are getting serious for many of us.
And I’ll be making a visit to stillNiceland next month.
Colin - that analysis is for the most part exactly correct. It’s a bad debt problem more than a credit crisis. The US created 5 trillion dollars out of thin in air by selling bad mortgages in bundles, much of it to foreigners. US foreign debt is 13 trillion, so 5 trillion is a lot of money. Most of that 5 trillion will never be paid back, since homeowners can and will walk away from their houses, and either the mortgage-back securities will be worthless or the CDS backers will be left holding the bag. It is also true, though, that the US felt compelled to create part of this new money (by expanding money supply) to fund the Iraq war, which may end up costing 1-3 trillion.
As for Iceland — the new agreement is for $6 billion loan, supplied by the IMF, Japan, and Scandinavia. Apparently it is without conditions by the IMF, which is how Iceland wanted it. So now things are in a stalemate of sorts. Britain won’t want to make any concessions to Iceland and will freeze its assets and use the Icesave issue as a pretext for playing hard ball. The europeans central banks had a meeting about Iceland and decided that they won’t give them any money, mostly because the problem is too big but also because the Icelandic leadership is completely untrustworthy. This implies that EU membership is also out of the question, for now. The IMF may give a little more but next time it will be with preconditions. The Scandinavians could give a little more but probably won’t, because they have their own problems, and the Icelanders have behaved badly. The Russians have pulled out. The Americans won’t give any money as long as Iceland has such an incompetent government. The Icelandic government (as far as I can tell - I may be wrong) has now taken the hard-line position that they won’t pay back investment losses or even bank deposits abroad and won’t make any concessions to the IMF. David Oddson and his pals refuse to move up elections or to leave office. So, it appears that Iceland will use the loans to pay off the 10 billion due soon and then will have to live off the 2-3 billion in foreign currency reserves for the foreseeable future.
Last week a well-respected University of Chicago economic professor gave a lecture at the university in Iceland and offered a devastating critique of the errors of the banks and the government. The current government, he said, was no more capable of running a modern economy than astrologers and Iceland would be no worse off if they picked people at random out of the phone book to run their country.
Clearly no one will bail out Iceland until Oddson and Sjalfstaedisflokkurinn are out.
Garpur - I’m not surprised that the IMF fronted USD6 billion along with Japan and Scandinavian countries, without conditions. Given the recent and precipitous drop in the value of the krona, there’s no need to require currency revaluation, and I suspect that low foreign currency reserves and debt exposure to nationalised banks will keep public sector spending under control whether the Icelandic government likes it or not.
This is shaping up to be years of hard times for Icelanders, and that’s a sad state of affairs.
Incidentally, one of the central (sad) ironies of the bad debt crisis in the US is that bankruptcy laws have become much more stringent, making it harder for people to walk away from houses they can no longer afford and so on. So, to review: it’s been our patriotic duty to consume for the benefit of the economy and the state (those Chinese loans don’t just come from nowhere, you know!), and when we fail in our patriotic duty, we are to be punished. Good times.
vikingisson - Using short words: I didn’t vote for the current administration, and I didn’t vote for the people who signed off on no regulation (literally: I lived in Washington DC from 1999 through 2007 and we had no direct Congressional representation). Taking the time to understand the shenanigans of high finance isn’t equivalent to being accountable for them.
I’ve read through most of the comments, and all I can think about is how everyone are disappointed in each other - and turning that disappointment to anger, which isn’t helping.
… and I can’t help to feel sorry for the icelandic students here in DK who are seeing their student’s funds disappearing by the day (worth 1/3 or something of what it was), but still having to pay the same in rent and for food.
My (danish) dad told me, when he visited Iceland for the first time back in ‘84 or ‘85 with my (icelandic) mum, the situation was the same - with the lack of foreign currency and the lousy exchange rate. I just think it is incredible how it is happening again - what makes it so hard to look to the past to try /not/ to make the same “mistakes” again…
(and yes, I am aware that the situation is not exactly the same, and that it isn’t exactly the same people in charge of things. I just think there’s a weird cycle in this mess…)
I must say how shocked and sorry I am that this has so rapidly descended into what seems like personal/national blame at a time when all of us, citizens of the world over, are being let down and victimised by our leaders and institutions (i.e. banks) which we have trusted. Most of all we have been let down by our regulators who should have controlled this in the first place.
On a personal note, I am a Canadian living in the UK but spent 5 happy years working for an Icelandic company in Canada so I too have prospered by Icelandic industry. I suspect many people in the UK have equally benefited from Icelandic employment.
I count many Icelanders as friends and know them to be generally smart, funny, and warm. Canadians at first usually perceived Icelanders as somewhat arrogant and they in turn found us absurdly apologetic. The truth was they were just frank and said what they thought in an unvarnished manner - something I came to learn to appreciate. My heart goes out to all of you - such a brave proud and industrious nation.
I have no idea what the real state of the UK freezing of bank assets really entails. If, as I suspect there will be pressure brought to bear on Iceland, with the with-holding of these assets, to pay more than the insured portion of the UK deposits, then this is frankly stealing on the part of the UK government - an act that I know would never be condoned by the British people if true. The Brits do have a sense of fair play. There is also likely some truth in Iceland’s trying to get all assets back home immediately and sort it out in due course - the UK would do the same similarly circumstanced.
I hope as we have, all around the world, been betrayed by these scoundrels, we won’t now further betray each other by losing our compassion and open minded tolerance for our cultural differences and view points. The world would indeed be a poorer place should we allow that to happen.
Just my few thoughts on the “incidents” happening to Icelanders.
Sure, it is very sad that individual Icelanders are meeting individuals in other countries, particularily Denmark and U.K. as mentioned in your post, who act towards them in an inappropiate matter. As other readers, foreigners living in Iceland, like myself, have pointed out, “we” meet stupid behaviour by (individual) Icelanders plenty of times as well. On the same grounds that is, like belonging to a certain nation, because of skin colour, what have you.
This kind of behaviour is always stupid. However, I cannot deny feeling a tiny bit pleased that it finally hits Icelanders. Just to learn how it feels the hard way. ( I know, that’s mean and I am not proud of it) In my observation, Icelanders do so often benefit from the positive associations and stereotypes concerning their country/nation (beautiful nature, tiny, wealth, education standard, music to name just a few). This is just accepted, even with a sense of pride. Now, confronted with negative stereotypes, there’s finally an outcry.
As I said, Alda, I condemn any attacks on individuals based on their nationality. However, I think it is rather childish to be so aggrieved “as a nation” (aka in the media). Moreover, it is kind of out of place and maybe even dangerous to subcribe to the general appeasement these days: “we didn’t know”, “I didn’t do anything” and so on. When it was visible for the whole world (and some Icelanders as well) what was going on here financially and how the lot was quite happily dancing the last dance on the sinking Titanic.
There’s nothing like a bit of international controversy to bring out the latent racist in the average Brit, it pains me to say. Unfortunately, for those who haven’t been, the name of Iceland will be associated with this for years so I guess there may be more of these disgraceful stories to come. People over here don’t seem to appreciate that ordinary Icelanders will suffer hardship as a result. BTW, don’t read too much into The Times’ choice of words - even so-called quality newspapers want to grab the attention somehow.
A list of countries/entities under financial sanctions by the British: “Current regimes
Al-Qaida & Taliban, Belarus, Burma/Myanmar, Democratic Republic of Congo, Federal Republic of Yugoslavia & Serbia, International Criminal Tribunal for The Former Yugoslavia, Iran, Iraq, Ivory Coast, Landsbanki Iceland, Lebanon and Syria, Liberia, North Korea (Democratic People’s Republic of Korea), Sudan, Terrorism and terrorist financing, Zimbabwe”
Don’t tell me this isn’t an anti-terrorist law. The British are the biggest hypocrites on the planet.
And most of those with good reason. What’s your rationale for “biggest hypocrites on the planet” then?
It would be very nice if you could report something on the exchange rate of the icelandic crown on the “unofficial” market. The Central Bank of Iceland reports an exchange rate of about 150,- crowns per euro, but there are reports about people easily selling euros for 300,- crowns in the unofficial market.
The European Central Bank does not even quote the icelandic crown anymore, which I believe is done at the request of the icelandic central bank in order to cover up the real status of the icelandic crown.
In short, there are no reliable reports on the exchange rate of the icelandic crown. I would appreciate information on this subject.
Another very worthful information would be the price of a Big Mac in local curency on Iceland since this price is often used when comparing price levels of different countries. According to the Economist the price of one Big Mac was 469,- icelandic crowns in July.
My heart goes out to Iceland and all its people. It is obviously foolish, childish, and wrong what has been done here. I had no idea anything was amiss until a dear friend showed me this site a few minutes prior. All I can do is find out more as the situation develops but know that there is love in this world even if surrounded by a stifling cloud of ignorance and bigotry against one nation (which is a pretty upstanding nation compared to several other “power houses”).
Much love to you *hug* and please continue to inform us.