So there has been nothing new in the story of Icesave – that awful monster holding this nation hostage – over the last few days. The media has been speculating that British and Dutch authorities will announce early this week whether or not they are prepared to return to the negotiating table, but so far not even that has been confirmed.
Meanwhile, Þorvaldur Gylfason, one of this country’s most eminent economists, says that the situation in this country now is worse than immediately after the collapse. He claims that a default on the part of the Icelandic state is imminent – that if the Icelandic nation rejects the Icesave bill in the planned referendum – and at this point in time everything indicates that it will – it will be an economic catastrophe. The Nordic countries will rescind their promise to lend money [which has been conditional on the closing of the Icesave deal], and when that happens the International Monetary Fund will stop its economic aid programme. The krona will subsequently plummet and we will see runaway inflation and widespread poverty.
This is indeed a bleak and very scary picture. It is also – objectively speaking – a fascinating predicament. The taxpayers of this country are effectively saying that they refuse to shell out for the recklessness of private enterprises – to bail out the banks, which of course is what taxpayers in other countries have been – and are being – made to do without having any say in the matter.
If the situation does indeed unfold as Þorvaldur Gylfason – and, indeed, others – are describing, what exactly will the international community do? Will it punish Iceland by stopping aid and watching it deteriorate into an economic wasteland? And if it does, what does that say about the structure of the system on which most Western economies are founded?
{ 40 comments… read them below or add one }
IceNews posted an interesting opinion piece about what Iceland can do, given that the IMF and EU are essentially blackmailing them.
http://www.icenews.is/index.php/2010/01/18/eu-imf-terms-called-“blackmail”-iceland-and-latvia-should-just-say-no/
I think that the doom and gloom outlook is a rather pessimistic extrapolation. The Icelandic people are far more hardworking, innovative, and tenacious for such a prediction.
I think Þorvaldur Gylfason’s predictions are a bit alarmist. There will be a crisis eventually, but perhaps not in the near future.
Iceland’s big immediate problem is that it is going to run out of foreign currency. The Central Bank has maybe $1-2 billion in foreign currency reserves. Supporting the ISK in its current pathetic state, even with currency controls costs something like $500-700 million. Imports into the country are something like $3 billion a year. And next year, 2011, a lot of debt repayment is due.
So something has to give, or default, if you want to call it that – if Iceland doesn’t get any more loans from the IMF and Scandinavia.
It is possible to “go native” to solve this pending currency crisis, to a certain extent. Bonds can repayed in ISK, which foreigners will stuff into the banks while they wait for currency controls to be lifted. Currency controls can limit the amount of outflow of foreign currency. And the government can simply print more ISK to pay for domestic deficits.
The main effect would be felt in the currency exchange rate. For instance, the ISK, currently at the artificial rate of 220 or so, would creep up a little. But the real, offshore currency exchange rate could shoot up to 500 or more. So a declining ISK with currency controls means that prices for most things will go up, or at least for imported goods such as gasoline and food. Mortgages will also go up, since they are price-indexed, but then again, the government is postponing mortgage payments so maybe they will continue that policy. Rents on the other hand are unlikely to go up too much since there is an oversupply of housing. Icelandic businesses have apparently been reluctant to fire people so far since employers know that firing someone means sending them into exile abroad. So unemployment may not go up that much.
Will this be a big problem for Icelanders? Well, I don’t know, since I don’t live there (thank god). Can Icelanders put up with 25% or more real increase in the cost of food and gas etc.? You tell me.
You could have a situation where most Icelanders continue to have jobs and live in nice, warm housing, but can’t afford to buy fancy imported food, or appliances and entertainment goods and clothes or travel abroad.
I suppose Iceland could put up with a mini-crisis like this for several years. But then the country would have to face more difficult decisions, such as gas rationing, cuts in medical goods, wage, rent and price controls of various kinds, combined with taxes to discourage certain kinds of consumption. The next step after that is to do what Argentina has done, to nationalize part of the pension funds. Iceland has something like $8 billion in pension funds in foreign currency. Iceland could live off of that for a few years. Or nationalize the fishing quotas or raise taxes on aluminum.
I’m pessimistic about the future of Iceland, but I think the government could forestall disaster by a variety of heavy-handed, interventionist measures. Curiously, the country could end up as control-economy like the old East Germany, where everyone had jobs and housing and all the beets and potatoes they could eat, but no foreign goods.
Right on the money Alda,yes Iceland the taxpayer that roared, Loadsa threats dire consequences etc ,if joe icelander does not recompense Gordon’s Gov. for bailing out the Icesave crowd (which was nice of him. Did he ask Johanna first ?). And after 1 year or so where did all the money go? by yours perplexed.If we had a referendum on NAMA I don’t think it would get through,Same across the water with the Royal Bank Scotland. Maybe Iceland is on the world stage as other wannabe defaulters look on as Icelanders refuse to bail out private capitalist enterprise, Well thats good after all Socialism is sooo bad (Free Swine Flu Shots etc). Yes sir low taxes,minimal regulation,privatisation of anything that stands still for 2 minutes.Globalisation,Free rigged trade etc etc and its all gone pear shaped ,decide that they want some of that there socialism after all, Hilarious Karl Marx is in hysterics.
A far more basic outline of the possible consequences than Flygill’s:
http://www.reuters.com/article/idUSLDE60H0NP20100118?type=usDollarRpt
@Flygill yes what a good post, Iceland like some vast economic experiment moving from 4×4′s to Trabant’s .East Germany ,Cold War your making me feel nostalgic comrade citizen for the 70′s ( I have a confession to make I bought ABBA records in 1975 in Minden West Germany, yes I know its decadent western music but I worshipped Agnetha and Frida at the time .)
It seems very simple to me – If the countries that are owed money by Iceland were to write the debts off then other countries would want the same deal.
@Bromley86 thanks for the link seems like the big boys ganging up on Iceland because their populace won’t roll over like all the rest for the banks,but no doubt they are in a pickle,however I look forward to my first trip there when I have saved up enough as I am in a pickle too.
Had Gordon Brown not behaved so irrationally and immaturely by invoking the terrorist act against Iceland, the Icesave issue might have taken quite a different route. Britain under his helm will never give in because he is a man who does not admit his mistakes. I think Iceland will have to reinvent itself in some very significant ways to move forward and not become insignificant, irrelevant, and forgotten.
We all have our dreams as to how we would like Western Economies to operate, but the reality is that revolution (whatever that is ) is not on the horizon and Iceland must be pragmatic and look long term. That’s why Glyfason’s message must be taken in by every Icelander before they vote. The scenario he describes is a distinct possibility. In Liverpool we tried to defy the Thatcher Government in the 1980′s and as a result, suffered years of poverty,economic and social exclusion. The Merseyside economy was rescued mainly by EU special funding which put in the infrastructure for redevelopment. Meanwhile, the lost generation moved south to find work leaving a city basically depleted of talent and skills. Thankfully, that is now over, but it took 25 years to effect a recovery. Being on the outside of society can have devastating consequencies. I know-I worked in health and education in Liverpool during those years and saw the effect it had .
Fear-mongering is going to come to a fevered pitch as we get closer to the vote. Don’t believe it! Things are going to be bad regardless of the decision. If you reject Iceseave, then you will at least have a country to call your own at the end of the day. The social unrest that is sure to come will be Icelandic business, not UN or EU business, i.e., no foreign troops to protect foreign property as is on display in Haiti right now.
Look at the US: bankers have been saved and are fat and happy, but the GP has received none (ZERO) of the benefits. Massive unemployment and millions living off little more than food stamps. Brittons are about to experience the same.
There is a war going on and Iceland is at the front. Fight back and give others courage to do the same.
Good for Kris. The US’s nasty 200-year history of ruthless meddling in Haiti should be a lesson to us all.
@Kris
“Look at the US: bankers have been saved and are fat and happy, but the GP has received none (ZERO) of the benefits.”
Uh, I don’t think you know very many bankers, then. The number of people that “are fat and happy” may be greater than 0, but it is by no means all “the bankers”, and it’s a very small number.
As for what the General Public has received, they got to have banks that were open the next day and didn’t have banking and finance of the modern world collapse into dust in front of their eyes, leaving them and their companies and governments with no financial recourse.
People that complain about the bailout clearly don’t understand how close we came to systemic failure of one of the pillars of modern society. And if you want to blame anyone, don’t blame “the greed of bankers” in the US or anywhere else. They were taking risks they didn’t necessarily understand, and its not their job to regulate their entire sector unsupervised. You can blame the regulatory systems throughout the developed world for letting finance institutions develop finance instruments that they didn’t understand while not keeping pace and allowing financial institutions get too big to fail.
Iceland’s question isn’t as simple as your post makes it out. They do not, in effect, give up more sovereignty by simply agreeing to this deal. They aren’t in a particularly strong position now, being blackmailed as they are. What they would do is agree to a deal that, given the norms established, is extremely unfair. Rejecting it, they face losing their ability to establish further financing of their government from international sources and possible pariah status in the EEA and worldwide.
It’s a lose-lose situation, and they will have to come up with a situation to deal with either. The Icelandic people need to think long and hard about the aftermath. Paying Icesave, and their other debts, saddles them with a heavy tax burden and the possibility of losing social benefits for decades. Not paying Icesave may lead to massive inflation, limited access to foreign goods (including oil), and limit their ability to expand their economy again. Which would you choose? In my opinion, asserting that they have the moral high ground without foreign support will be ineffective. I hope they can drum some up quickly.
“The next step after that is to do what Argentina has done, to nationalize part of the pension funds. Iceland has something like $8 billion in pension funds in foreign currency. Iceland could live off of that for a few years.”
Argentina is the most likely scenario for Iceland and its not pretty. Forget a 25% increase in the cost of living, Argentina was hit by 100-200% increases. Look at SURVIVING IN ARGENTINA http://ferfal.blogspot.com/ if you want to see to consequences of default.
The pensions funds are susceptible to seizure, if the Iceland doesn’t pay its debt that would be the best place to start.
Interest%
If it might be argued that there is plenty of blame to go around, on all sides of the Icesave fiasco, shouldn’t the consequences be apportioned equally? In which case, aside from whether the full $5 billion is paid back or not, why even a single cent of interest paid? To me, that doesn’t seem like just asking for one’s money back, but wishing to make a profit on the mistakes and suffering of others.
If Iceland may currently need the loans of the IMF and Nordic countries, and to have the Icesave mess settled, it also needs to move forward in a sound way. That begins by not agreeing to what it cannot accept. This is a negotiation, it is only a question of terms. Of course these other players do not want to renegotiate, but surely will if forced to. Chances are these loans will not be withdrawn in the interim. It is a chance taken now with courage, or the consequences of a bad deal long years hence.
Rejecting icesave and informing people that states should not socialise losses would be the best thing for Iceland. It may even make some governments realise that they shouldn’t make poeple pay for the profligacy of others. Iceland has natural resources it can sell those to the EU or Asia, if EU doesn’t want them, Asia will.
Stealing money from pension funds: well that’s what some on the left may want. Its something that only the Icelandic government could do. Sorry Peter, but foreign governments can’t steal from private funds like that – there is nothing in law to allow that. Then Icelanders could reject via referendum (te he) any proposed law that said their government should steal from them.
I think the people who chased yield and invested in Icesave should stump up money to replant trees , to pay for all the wasted newspaper columns on the subject. You pay your money and make your choice. But some Icesave investors think taxpayers should bail them out.
interest%
I agree on this. Be seen to be willing to pay something back- the capital, yes, and it seems that in time, most of this will be covered by the Landisbanks assets. But it is the interest that is unfair and crippling, and if the UK and Dutch Governments refuse to act fairly on this, I assume the result will be future defaulting of the debt. The problem in the UK is that there is going to be a General Election in May and I suspect, given the debt the UK now has, no politician is going to want to be seen as acting ‘soft’. That’s why I think that you should do all you can to get a deal swiftly before the referendum.
sylvia from viking wirral
“…no foreign troops to protect foreign property as is on display in Haiti right now.”
Oh, and the recent earthquakes in Haiti have probably been a conspiracy by the US to gain access to the country?
As far as the comparison with Argentina goes, Iceland shouldn’t aspire to follow its path. Currently, the government of Argentina is desperately attempting to repay debts by plundering their Central Bank’s currency reserves – causing considerable political turmoil – to regain access to the international capital markets, almost a decade after defaulting. Apparently, there are reasons to repay debts and this is better done sooner than later in order not to lose much time.
Tom: I don’t know any bankers. Oh well. I don’t think it is deniable that there has been a massive shift (redistribution) in wealth in the US (UK too) to the top 1%. When I say banker, in general mean it as a euphemism for the global finance elite: Wall Street, City of London, etc. Have you seen the bonus total (and profits) for Wall Street for 2009? Best ever! I call that ‘fat and happy’.
I see the systemic failure as a good thing. The racket called global finance is destroying democratic institutions all around the world. People (banker people) would have it that our lives and well being depend on the (corrupt) banking system. I don’t think so!
My feelings are that the process of globalization, financial deregulation and trade laws that diminish the ability of local govs to enact laws. This means that people have less and less ability to manage their affairs at a local level. I consider this to be an anti-democratic trend and bad.
Loss of sovereignty in these cases is not about flying a new flag, it is about the ability to enact laws regarding trade and finance as well as having money to build bridges, schools, hospitals, etc. If not loss of sovereignty, then call it de-facto loss of sovereignty.
Simple is a consequence of two things. I don’t want to drag-on and it doesn’t have to be made complicated. No experts required.
Google NAFTA for the negative side-effects of neo-liberal trade agreements that are certain to come with IMF austerity measures. Try nafta democracy and see what you get.
” I don’t think it is deniable that there has been a massive shift (redistribution) in wealth in the US (UK too) to the top 1%. ”
You are overstating the number of these wealthy individuals drastically or the wealth they have accumulated. Either way, people were not getting wealthy over “keeping the poor man down” or whatever you want to call it. That is simply not the case. If you are talking about post-crisis, then no one has “won out” except people that predicted it and ordered their finances accordingly.
“I see the systemic failure as a good thing. The racket called global finance is destroying democratic institutions all around the world. People (banker people) would have it that our lives and well being depend on the (corrupt) banking system. I don’t think so! ”
You maybe have wanted us to be reduced to a barter economy; I’m not so keen. The increasing sophistication of finance is not a conspiracy. If you have issues with the interlocking directorates that have often taken place between gov’t and finance, blame the government just as much, your so called democracy.
“My feelings are that the process of globalization, financial deregulation and trade laws that diminish the ability of local govs to enact laws.”
Unless you can provide positive correlation between the two, it remains just that, your “feeling”. Not exactly a basis upon which one would want to operate the international political economy.
As your for worries about “loss of sovereignty”, I am well aware of the measures that the Bretton Woods institutions force on recipients of your money, I don’t need to google them. I also don’t agree with them. That doesn’t change the fact that a “sovereign” country with a declining population and severe brain drain because people flee to more prosperous countries would be a failed “sovereign” country sentenced to generations of rebuilding.
Iceland is stuck within the current framework of the international finance, and there’s no way around it. Turning their back on it will gain them nothing except isolation and a worse crisis. The various countries offering them aid are doing so through the IMF, and they need any financing they can get.
Not a conspiracy. An opportunity.
Icelandic citizens shouldering Icesave results in every one of 320,000 Icelanders having €11,000 added on to their debts. Plus interest.
Brits and Dutch having to take on the debt themselves results in each of the 68,000,000 citizens of these countries paying €51.
From this angle it would appear that Icelanders are being blackmailed into paying Icesave just for the principle of it all. Or maybe forcing a natural resource-rich country further into debt has an alternate motive.
British politician Denis MacShane suggested Iceland sell its energy resources to settle Icesave debt.
Oil is awfully expensive and increasingly sparse – wouldn’t it be nice for those Brits and Dutch to have a geothermal island under their thumb?
Yep Kris you are right and if you want to end up like other countries than pay back the money for your robber barons. That’s what we have done here in Amerika. If you think G & S is bad just wait until the imf get done with you. South America is just now coming out of the darkenss. We in the US will never see the light at the end of the tunnel. Oh if you think you have problems take some time and read up on Japan. Dam the citizens of any country is the cry of the elite.
http://bilbo.economicoutlook.net/blog/?p=7409
The above will give an idea of what happens when you pay your bills, they just want more until there is nothing left. If you can get hold of the book Shock Doctrine it also explains what happens and has happened to other countries since this started this under the watchful eye of milton freidman and it isn’t pretty. This is happening in slow motion in Amerika. Sad we don’t deserve this either.
“That’s why I think that you should do all you can to get a deal swiftly before the referendum.”
That is ridiculous. Icelanders should do a deal with a discredit government very quickly, before that pathetic government gets booted out of office? Sorry, but Gordon Brown is a moron, he put UK taxpayers on the hook for Northern Rock and the Scottish banks – the sooner he is gone, the better. Icelanders should reject this, and then deal (hopefully) with a better government post-election.
If the UK doesn’t get rid of Labour, the debt will be downgraded, and the UK will be begging to the IMF, just like the last time Labour were in power.
Are there so few on Iceland that you can not find among yourself enough people to set Iceland First in your election then your debt is not your biggest problem-any gain Iceland get, will be lost. Þorvaldur Gylfason says that your political structure is to blame. This is known in the Nordic countries.(Read his web page on the subject) And Argentina “way” is not working out so well for them(google it and see for yourself). The help Iceland will get is the one IMF is giving( or what the Nordic countries is lending you). If you chose to say No to that help when that is Iceland’s choice. Ponder this Why is it that so few of Nordic governments agree with Iceland ?(even if we knowing your country so well and would help Iceland if the case merit it )
It would seem that accepting the debt would just guarantee default at some point in the future. So what’s the point of the exercise? The only way it can work is if the financial crises is temporary and goes away soon. Or if the value of both the euro and sterling collapse compared to cod and EVE Kredits.
I also don’t understand why accepting the Icesave debt makes Iceland a better credit risk. If Iceland is going to pay 5.5% on its debt, sell bonds to private individuals, they are easier to default on, ask the people who bought Argentine bonds.
Without money from outside Iceland will have to reduce the size of government ( jobs, salaries, and benefits) and increase taxes. In other words austerity measures. Argentina is actually doing reasonably well at the current time. Russia also. But the transition was painful, and even deadly, for a large number of individuals.
Michael Lewis said “there is nothing in law to allow that”. There is also nothing to stop the government, except the government. Hong Kong withdrew its gold from the UK for some reason. Why? So I would not put anything past a desperate government. Creating a very negative precedent by confiscating Iceland’s small amount of assets would damage ‘The City’s” reputation probably forever. Why would any sane person keep assets in UK, instead of Ireland or Switzerland or where ever, after that. As far as I know there was no retribution for the Argentinian bond default.
Perhaps Iceland should hire Argentinian experts, trust me they know what to do, and have done it before. Argentina is not in default at this time so they are not busy.
Michael
Sorry, but Gordon Brown is a moron, he put UK taxpayers on the hook for Northern Rock and the Scottish banks – the sooner he is gone, the better. Icelanders should reject this, and then deal (hopefully) with a better government post-election.
If the UK doesn’t get rid of Labour, the debt will be downgraded, and the UK will be begging to the IMF, just like the last time Labour were in power.
I often see this sentiment. The second paragraph may well be true, but if the Conservatives are going to slash spending from day one, what makes anyone think they’ll be any easier on Iceland?
Even if Icesave is relatively small beer financially, politically it might not be the best move to start butchering the defence budget whilst letting Iceland off the hook.
George
I also don’t understand why accepting the Icesave debt makes Iceland a better credit risk.
That’s an easy one. The assumption is that no Icesave agreement = disruption or even cancellation of the Nordic loans. Which means disruption or cancellation of the IMF loan. The IMF have come out now and said that delays may also arise from internal pressures (i.e. UK/NL/EU), which was presumably always the case even if they tried to pin the last delay on the Nordics.
Those loans are assumed to be vital to the recovery of the Icelandic economy.
The Icesave dispute: Priorities and division of claims:
http://www.slideshare.net/hjalli/the-icesave-dispute-priorities-and-division-of-claims
I strongly recommend the above illustrations to understand the current Icesave-agreement. Iceland is being robbed as I see it.
If possible, Iceland should settle the dispute in the EFTA court.
If the referendum votes No, then the current version of the icesave law is still in force. This promises to pay , but on terms not agreed by the Dutch and UK governments. At least, as far as I understand the situation…
The Dutch and UK governments will come back to the negotiations because it is not in their interests to have Iceland default on the debt (they would get nothing).
Alda.
Could you shed some light over Þorvaldur Gylfason’s other than “professor” experiences?
I’m not a professor but witnessed far worse economical and political situations (before, during and after).
So my opinion – nothing terrible gonna happen. The only problem – to do things wisely. The current Icelandic government is not capable for that wise job.. That’s for sure.
Katie- your analysis on the per capita debt for UK and Netherlands of 31 euros omits that in the UK the national debt is now £178 billion and still rising, mainly due to the banking collapse and global meltdown. There will be huge cuts in UK budgets over the next few years and unemployment at just under 2 million, has not yet peaked. I think that the interest rate you are being levied is unjustified and unfair but I suspect I hold a minority view here. IceSave was a branch of Landisbank, so the Internet depositors (not part of the financial elite, but by and large small savers) it is argued,should be treated the same as the Icelandic depositors. This is what makes the argument really difficult. Even with Darling’s payout, many of them have lost substantial savings.
Michael: I’m not sure that an incoming Conservative Government would treat the Icesave issue differently. I think the leverage and pressure is best put on now. The Tories are arguing for austerity measures to reduce the debt in the UK.
sylvia from viking wirral
Isn’t it true that the amount of liability of iceland and its taxpayers is a question of law and fact for a court? GB and NL bring a suit and the matter is resolved. The Icesave “deal” seems like an extrajudicial shakedown. If prperty rights are such a big deal a fair court will sort it out. No treaty. No vote. No rush.
Bob
Here’s a solution dating back to the 1750′s.
http://en.wikipedia.org/wiki/Consols
Step One
Consolidate all of Iceland’s debt into one Pool.
Step Two
Divide the Pool into proportional UNDATED Units eg billionths, redeemable by Iceland at any time.
Step Three
Set a reasonable %age dividend on Units, possibly index-linked.
Step Four
Issue Units to debt holders in exchange for debt.
Outcomes
1/ Iceland – is free of debt, and may reduce their financing costs at any time through buying back Units.
2/Investors – have a valuable income-bearing asset of Icelandic Equity, which they may keep or sell, assisted by the fact that there is one single pool of liquidity.
The absence of debt makes it more likely that Iceland can pay the dividend: this in turn lowers the risk, and increases the value of Units.
I fear that the IMF and conservatives in Western countries who do not like social democracy would like to see Iceland be forced to dismantle the welfare state. Of course, it is unfair to force the entire Icelandic population to pay for the misdeeds of probably less than ten bankers. Ironically, we see a growing trend in capitalistic countries to “socialize” private business risk while keeping profits “private” and information about enormous executive salaries and benefits “confidential.”
To Flygill your posting is interesting to read and the same goes to Bromley86. A comment to geo8ge your posting :my I ask if you mean it seriously comments like ” But the transition was painful, and even deadly, for a large number of individuals.” so on and so forth.
A comment to ADA “rescind their promise to lend money” – I would understand as terms(conditions) for lending Iceland money (obligations Iceland has to meet). Rescind their promise – is victimizing Iceland(or can be understood as such ?) even if I understand that the position of the “victim” is a strong one(for getting “justice” and sympathy ) I am not sure that the facts of the case merit it. ( But my understanding of English might be lacking (as I am not a translator)). I am not even sure that looking upon oneself as a victim is gone help in the situation Iceland finds itself. But it might accurately describe the emotions of standing alone( that might be your intention?)
Alexander. His CV, in case you’re interested:
http://notendur.hi.is/gylfason/pdf/cv46.pdf
Andrew
The Dutch and UK governments will come back to the negotiations because it is not in their interests to have Iceland default on the debt
Although true, the counter is that when the negotiations finish, the UK/NL get their money with interest from Oct 2008. Iceland’s economy however will likely not receive the funds it needs in a timely manner until the time that it signs into law.
Sylvia
This is what makes the argument really difficult. Even with Darling’s payout, many of them have lost substantial savings.
Not the case, AFAIK. Even if Iceland extended the 100% guarantee to all Icesave depositors (before anyone gets excited, this could simply never happen as it would lead to immediate sovereign default), that would not include the only British individuals who have not had all their savings returned (i.e. the IoM KE people and the Guernsey Landsbanki people).
Of course, there are some retail onshore depositors in the NL that have lost out, but that’s a different matter.
Just look at Haiti. The world already DOES let countries descend into ruin – if the people of the country let their leaders screw them over. If Iceland does not get the whole financial collapse figured out, written out in the history books, and justice served, then it will descend into the same situation as Haiti has been for several decades. That’s what Eva Joly means when she talks about the social contract. That’s why it’s so important to solve issues like Icesave and to make sure those responsible for the crisis are prosecuted.
From an article written in 2004 about Haiti that I’m reading now that made me go “WOW”:
“There once were many millions for Haiti from the World Bank, but the bank says the money bought almost nothing, and it says it will exercise ”extreme caution” before it resumes trying to help Haiti.”
“The fundamental barrier to development in Haiti, and the reason so much international aid has failed, the World Bank says, has been two centuries of terrible government controlled by ”a small elite” that always monopolized money and power, and ”often used force to control the country.”
Talk of a small elite that monopolized money and power reminds me a bit of the IP and the talk of the Icelandic octopus. I don’t think things in Iceland will become like Haiti – but I think there are striking parallels in the way an elite can exist in a country side by side with the people it screws over. The IP must not be allowed to rewrite history or control opinion in Iceland. There must be more democracy movements and more political diversity to ensure that Iceland’s elite doesn’t Haitify the country.
current framework of the international finance:
extortion
racketeering
corruption
gambling
violence
How could anyone possibly resist!
Thanks, Bromley.
)))
Even worse than I expected
A person who has never ever worked in real economy… explaining now where money comes from