Actually it is not hypothetical at all but totally real.

My point is that the Icelandic law did not discriminate on the basis of nationality but on the basis of geography.

All countries do that to some degree. Take the UK for instance. Their law is such that if you do not live in Britain then you are not allowed to have a bank account in Britain. They maintain that it is because if money laundering precautions but everyone knows that the real reason is to limit their exposure to deposit insurance. This explains the popularity of of accounts in the Isle of Man, because if a British old age pensioner wishes to spend their golden years in Spain, and move their address over there, they also have to open up account in Spain and move their assets there or open up an off shore account, on the Isle of Man for instance.

Try to pay with your Icelandic credit card in a Danish restaurant…in all likelyhood you will be forced to pay an additional 5% on top of your bill(an actual story). Discrimination ?

I congratulate you on your sense of fairness but alas, in times of crisis, fairness, truth and justice are often the first things forgotten. Or does anyone think that Iceland has been treated fairly by being denied the chance to have the matter of our exposure settled in court? Or is it fair that the UK used their leverage within the IMF to delay the loans until we accepted to become Iceslaves?

And actually Dean has a point. Please read article 34 in the icelandic laws on financial undertakings.
See: http://www.althingi.is/lagas/nuna/2002161.html

Similar articles are in laws in each state across the EEA.

In other words, if the financial authorites in the UK or Holland as much as suspected that there were irregularities in the operations of the Icelandic banks, such as not being able to meet their obligations to depositors, then they were allowed to take action.

Peter – London – the British authorities deny that there was any such offer. and it had nothing to do with the finance minister.

Magnús – what you are describing is a hypothetical scenario, it is not the law as it is today. Perhaps the greatest tragedy of Icesave is that it happened so fast that regulators did not have time to catch up and create a framework around it that would adequately protect those at risk. It was “above borders” – yet it was an Icelandic bank. As soon as the Icelandic government decided to cover the deposits of all Icelanders in Landsbanki, it had to do the same for foreign nationals with money in that bank. The EEA directive is very clear – you cannot discriminate against people on the basis of nationality. The other option (which is moot now) would have been to not guarantee any deposits – not even those of Icelanders. That would have meant instant collapse of the economy here – and by that I mean TOTAL collapse. So we’re f*cked either way.

Dean – Iceland is part of the European Economic Area and our banks had the right to set up shop anywhere within that area. it was not up to British or Dutch regulators to approve or not. As to your second question, I don’t believe Icelandic authorities can freeze assets in other countries.

They’re not entirely blameless for not scrutinizing Landsbanki back in the boom years.

Bottom line is that a healthy economy is the only hope of paying back any of the mess. A populace gone back to sod huts and rotten shark can’t pay back anybody. Hard choices ahead but I hope that the natural resources aren’t sold off as what happened to so many debtor nations.

Even with having lost so much myself the thing that I might be most upset about right now is that I can’t make the trip to Iceland I had planned for the solstice. I could drive and train ride north right from here but I’ll still only be at ~51 degrees north to a place not nearly as exciting. Anything farther is way out of the budget. Maybe next year….

The argument that the relevant EU/EEA law requires equal treatment is flawed, as AFAIK it only requires equal treatment by the deposit guarantee fund. There may be a bigger issue with the non-discrimination laws in Iceland, but the simple fact is that Iceland cannot afford for any case to succeed.

And I’m sorry to hear about your personal circumstances.

We, as Icelandic citizens, enjoy all kinds of benefits by living, working and paying our taxes in Iceland. Example: maternity and paternity leave, unemployment benefits, free schools through university etc. When the Icelandic government sees fit to increase those benefits it is under no obligation to see to it that every citizen in Europe enjoys similar benefits.

I see no difference with the deposit guarantee. If the government sees fit to use our tax payments to guarantee our deposits it is entirely within their power to do so. After all, Iceland is in full compliance with the EU directive on deposit guarantee schemes as has been verified by EU itself and if it chooses to go further in the geographic area that it’s laws apply to then it is within their discretion to do so.

I also see no discrimination here. If John Johnsson had deposited his savings in Iceland, as Jon Jonsson did, he would also be guaranteed by the Icelandic law. John would however have seen his savings cut by up to 60% because of the devaluation of the Icelandic krona, a chance he was never willing to take but a risk that icelanders have to take. The Icelandic protection scheme is not for deposits made by Icelanders but for deposits in Iceland, a subtle but important difference.

The reverse is also true. Icelanders with deposits in Icesave accounts get no extra protection by the legislation.

Also, let us not forget that the desicion to protect deposits in Iceland in no way changes the protection that depositors in the UK or elsewhere could expect on their deposits when they made them.

Having said that, I feel horrible that ordinary citizens in other countries have seen their savings evaporate because of the folly of a few Icelanders.

I however, as most other Icelanders, is in the position that not only have I lost my job, lost a part of my savings, had my loans doubled and the value of my assets halved, I now have become indebted to those foreign depositors and will be paying for the next fifteen years. There is no protection scheme in place to save me or my children from poverty, discrimination or not.

The strange thing is that Iceland is seeking more money from, you guessed it, Russia.
http://www.guardian.co.uk/business/feedarticle/8544441

Anybody know why this is? My pet theory is that more debt is better, as long as it’s less than 5.5% because then you can pay off the first loan.

…And people here in the USA are in fact at risk of dying due to the stupidities of the people in charge. There have been millions of jobs lost and many people evicted from their homes. The people who will pay the price for all this are still shut out of decision making.

In a literal sense the people who caused this mess economic are still in charge and perhaps growing in wealth and power. A few “leaders” have been removed but have been replaced seamlessly by others of the same type. The bills still yet to be paid by us all.

Iceland may in fact be lucky to have some measure of sanity by being able to simply identify Icesave. Here the banks are too numerous to really have names. I see why I read the Iceland Weather Report as Iceland’s story has clarity because the names are knowable. It is educational!

The narrative in the USA is a jumble. The mantra here is “it is nobody’s fault, no one is to blame”. The relevant thing is that this is not true.

The people who obeyed the rules, did the work were betrayed, with intention or without intention. It was in truth somebody’s fault.