The statement below came in about an hour ago from the government’s press office.
I watched the government’s live press conference and, well, not much came as a surprise. They were disappointed, concerned about Iceland’s foreign relations, concerned about Iceland’s image, concerned that this would thwart economic recovery … in short, they were concerned.
The President of Iceland has declined to sign a law authorising a state guarantee for repayment of loans provided by the UK and the Netherlands to the Depositors‘ and Investors‘ Guarantee Fund, intended to cover payment of the minimum deposit guarantees to depositors in the UK and Netherlands branches of the failed Landsbanki Íslands hf. The law was approved by Althing, the Icelandic Parliament, on 30 December 2009. According to the constitution, the President’s decision not to sign the law requires it to be put to general referendum as soon as possible where it needs to be supported by a simple majority of voters in order to remain in force. In the interim, the law enters into force as passed by the Althingi. The Government will now reflect on the decision of the President and review the situation.
Despite the President‘s decision, the government of Iceland remains fully committed to implementing the bilateral loan agreements and thus the state guarantee provided for by the law.
The government views the loan agreements with the UK and the Netherlands as an integral part of Iceland‘s economic programme, as a solution to the uncertainty regarding repayment of deposit insurance required under Icelandic law. It constitutes an important step towards normalizing the external financing of the country. The government’s economic plan, developed in cooperation with the International Monetary Fund and with financing from the IMF and governments of the Nordic countries and Poland, remains in effect.
Economic data indicates that the economy is performing better than previously projected and is already showing signs of recovery from the financial crash of late 2008. “The government is committed to ensuring that Iceland honours its international obligations and continues the important work of regaining forward momentum thus ensuring significant new job creation and renewed economic growth,” Prime Minister Johanna Sigurdardottir said in a statement today.
Reykjavík 5th January 2010
{ 7 comments… read them below or add one }
I’m not a Nicelander, but it seems to me the president made the only choice open to him. If he signed it, it would used against him. Kick the can down the road & let the voters decide. I think it was a good choice.
And it might work. Nicelanders might approve the deal. In which case the pols are off the hook & Icelanders have only themselves to blame,
Unless the EU kicks up a stupid big stink about it & pisses the N off the front of Nice. The sour note from Ireland, how the Murdoch papers are playing it, is not helpful. On the other hand, if Ireland, or Greece, or the Baltic countries are next to appear in front of the firing squad, they may be hoping that Iceland stops being Nice & sets the precedent that gets all of them off the hook.
But I’m not a Nicelander. Great blog, by the way.
Well if the Icelandic government is planning to ignore the wishes of its people, one can only say good luck with that…
I suggest we have the referendum next Monday.
And a day off work for everybody, of course!
“And a day off work for everybody, of course!”
Sadly, more people will have days off work than you can imagine if Iceland loses its international credibility and thus its ability to borrow and trade with favorable terms. This is all very short-sighted. Too bad, and after so much hard work on the part of your PM and Finance Minister . . . .how awful.
It seems that President Grímsson elected to defer this decision to the Icelandic people in a referendum because so many had expressed a strong opinion. Why not? Perhaps what must be a bitter pill in any event will go down more smoothly if citizens know at least a majority of them decided on the strategy.
Perhaps you could explain why the President and ‘the government’ seem to at cross purposes? Who then exactly is the ‘government,’ and can their expressed views on this matter prevent a referendum?
In the mean time, how is Eva Joly doing? Has she (or her committee) already recovered some money of the 1000 billion ISCrones that was ‘loaned’ to individuals / families /businesses surrounding the Kaupthing and Landsbanki bosses (I refer to the Kaupthing’s loan book exposed blog)?
Obviously, as long as these people are not yet completely skinned from their illegally obtained profits and all their properties -down to their clothes on their backs – it is not up to the Icelandic peope (or, for hat matter, the Dutch and UK taxpayers) o foot the bill.
So, how is Eva progressing?
Pieter
I really enjoy people today that who post often, it is very hard to put together all particular information just about any means. Splendid job.