I’d point another fundamental question: is the whole nation responsible for the acts of it’s business and political elite or not?
After more facts emerge there is no question that Icelandic government is equally if not more than buisenessmen responsible for what has happened.

The question is about where is the line between “taxpayers” and “elite” ? As it turns out many Icelanders see their immediate future with Independence party. That’s ok as long as conservative values are concerned. That is not ok as long as party’s leadership and course is concerned. It must be understood that Independence and breaking of rules are too different things. Party’s followers must already be protesting against new-old leaders returning to public life once again.

In practice there is probably no other way to fix that kind of mentality than to take responsibility for Icesave and start negotiating. Hardly anyone is asking Iceland to commit an economical suicide and if someone does than it is a different talk.

“Whether or not the President signs the Icesave legislation is not important for Iceland’s medium-term economic prospects. The question is whether national insolvency is better acknowledged now or a few years down the road.”

Another member of the list, Professor Michael Hudson, has also pointed out frequently that debt which can’t be paid, won’t be paid.

As a practical exponent of market regulation and development for almost 25 years – for six of them as a director of a global energy exchange – I think that there is another way for Iceland, with a little help from Nordic friends like Norway, maybe, to emerge from under the debt burden.

This is simply to consolidate this debt into a single class of UNDATED units (like the quaintly historic undated UK ‘Consols’ and War Loan on the UK national balance sheet) and to pay maybe a one or two per cent index-linked return, or a return linked to (and funded by taxation of?) energy prices.

Iceland’s creditors would then have what is essentially a form of equity, with a market price like any other form of equity.

Iceland could then gradually buy back the Units over the years if they wish, which will gradually reduce the outgoing financing cost.

The result would be a sort of modern version of a Jubilee, through a one-off ‘debt/equity swap’. Nasim Taleb and Willem Buiter both suggest that equity is the bets solution for unrepayable debt.

As Tomasson is essentially saying – in the medium term, Iceland will have to go down this road, so why not bite the bullet now?

One feeling I have on the whole thing is that Iceland as well as many other countries needs a shake off. If Iceland is let to wash hands off Icesave then it (and not only Iceland) will get a green light to actually plunger anywhere in the world and return to “safety net”(as was put by Icelandic president) of a home country.

Like it or not but Iceland drifted into the direction of becoming a shelter country for “financial geniuses”.

It’s only good the whole thing has stopped before even more damage was done. Simply put if it happened a century ago then people of Reykjavik would observe British and Dutch battle cruisers talking “canon diplomacy”

Today British and Dutch have chosen other means but what else could they do? I can imagine how angry Dutch people are after Landsbanki promised and immediately ignored the promise to stop collecting more money. That is what is worth mentioning. There were other small, negligible facts like Icelandic ship receiving repairs in some East European country and leaving without paying to the “safety net” of a home country. That would never happen with companies of most countries because everyone knows by expierence that such a thing can backfire.

Hopefully people (not only Icelanders) will realize that ignorance, corruption and unprofessional management can do cause problems. That is the whole point.

It is completely unacceptable to here Icelandic government simply saying foreign savers are on their own, we don’t care. The only answer one must expect after that is a “canon diplomacy” which was exactly what Iceland got.

On the other hand it is good to hear when some Icelanders acknowledge they have to stay honourable and take responsibility for Icesave. At this point it is possible to start talking and searching for a middle ground.

1. For me it sounds rather strange that you deny the right of people to decide about their future. I understand that it’s easier if someone else i.e. government, parliament, president make decisions for you. Very good for excuse later on.
You were so excited about National Assembly as ants wisdom but now you don’t need that wisdom any more?

2. I think your following assumption is absolutely wrong

Iceland needs to re-establish its credibility. I don’t think we do that by refusing to sign this agreement. Yes, it is unfair, but maybe this is just what re-establishing credibility costs.

Iceland won’t re-establish any credibility …cause those responsible are getting free of trouble. So they will repeat it again and again. Next time they will open SafeIce Investments bla-bla-bla etc. And they will be much more careful and prepare the SafeIce agreement beforehand…Then they will repeat it. Why not?

3. And most important – the real reason behind the case (unless you truly believe UK, Holland, EU, Iceland politicians and gangsters care about “interest of people”)

it is not hard to envision the fury that would erupt in this country if a foreign bank opened up shop here, collected billions of pounds or euros in deposits from regular Icelandic citizens, and then went bust. I think most Icelanders would expect the governments of the respective countries to do something.

Government paying for private entities? Isn’t this against the basic rules of capitalism?
The whole “guarantee idea” as it is now was born as part of European financial mechanism. And now “architects” of this mechanism are facing the option – to admit that basic design of that mechanism is wrong or claim that only Icelandic “parts” were defective.
It was not the “crazy vikings” that caused the troubles – they just used this malfunctioning mechanism for their benefits. But it showed clearly that this mechanism is not working. So blaming Iceland and closing the case is the only way to postpone of being getting accountable.

The issue is a way far bigger than IceSave and Iceland. Iceland just exposed the problem in a very clear way – due to it’s small size. Like in the lab – all processes were fast and visible.

PS. I tried to be short and skipped legal and other aspects. Really.