Or on the Guardian website, to be precise.
Now all I have to do is stay away from those comments.*
MORE OF THE SAME WEATHER
Drizzle, extremely overcast [oh delightful SAD light, where would we be without you?], slight wind. At the moment it’s 7°C [45F], the sun came up at 10.07 [coulda fooled me], will set at 4:18 pm.
*Er, because I value my sanity.
{ 8 comments… read them below or add one }
Great article - well done, Alda!
Yes, of course it was extortion. And premature surrender too, by Haarde & The Stooges.
I wonder if he mentioned this detail at the meeting last night:
“REYKJAVIK, Nov 17 - Iceland said on Monday it may need to introduce currency controls, raise interest rates beyond already record levels and ultimately borrow as much as $24 billion to fix its broken economy… In total, Iceland expects it could need to borrow some $24 billion over several years to ensure its financial system and currency can function properly again.”
$24 billion. That is staggering. Mind-boggling. Who is going to loan that much? How could Iceland ever pay that amount? Really, they would have to sell everything in Iceland except a few wooden spoons to the Chinese to raise that kind of money.
Here’s another Icelander who, like Alda, is defending Iceland in the foreign press: http://online.wsj.com/article/SB122695569056034695.html
But then again, it’s written for Wall Street Journal (i.e. Right-Wing-Nuts) by a board member of the Central Bank…hmm. (Again, does the Iceland Central Bank ever hire any actual economists? Other than lawyers, political philosophy professors, etc?) I think Alda should sit on the board!
About the Guardian article — the comments didn’t look too evil…yet. Except for the guy who suggests Icelanders deserve to go back to living in turf houses & eating whale blubber….touché!
Muriel - thank you muchly!
Jessica - yes, that’s Hannes Hólmsteinn, the guy I refer to in the news blurbs in the sidebar. Davíð Oddsson’s main crony.
Great article and great for profile raising. However, the “extortion” word is gonna be provocative - more so than “blackmail”…
Exchange rate situation slightly better today. Free float 284/1 vs 174/1 official. Spread has now narrowed to 110 ISK, still staggering though. The comment about introducing currency controls looks to me to be at odds with the IMF bailout conditions, though I’m not very familiar with them. Something to look into? The last thing Iceland can afford now is prove to be not true to its promises or being seen as uttering threats it cannot make stick.
Be careful with these amounts people are quoting to fix the current problem. Every loan needs to be seen in context (over what time, at what interest rate, is this refinancing or an additional loan, etc etc). It looks to me someone is trying to scare people (into accepting a slightly lower loan or for political purposes). Just quoting amounts out of context does not mean squat.
Hell, I would accept a 24 billion $ loan if the interest rate was attractive.
Cool article! About the krona, I think that any rapid change (especially dropping it) might create more problems than solutions. The focus instead should be on slowly and carefully restoring confidence in the existing currency and then when things are more stable then consider a change.
South Korea is a good potential model when considering Iceland’s current relations with the IMF. It too had to take out a very large loan in 1998 (US$57 billion or so) and the short term effects stung but the country has able to pay it back in short order compared to other states in the Asian region which were affected, such as Indonesia.
Nobody gave me ISK 1,000 billion! Not happy!
Great article Alda (and photo! :D) - frankly I think the comments were fairly mild compared to many you find on the Guardian’s Comment is Free site - you got away lightly!
Thanks Rachael. Yes - they were fairly mild - so much that I even ventured to join in .