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Lowest Energy Prices!! – Or how to sell yourself, Icelandic style

Ok, so it’s been a while since I’ve written a really depressing post, right? So it’s about time, right?

Fortunately the majority in the Reykjavík City Council is making it real easy for me.  Because they’ve gone ahead and approved that appalling sale of nearly 50 percent in HS Orka to Magma Energy of Canada [oh, excuse me – of Sweden]. Need I mention that the Independence Party holds a majority in the Reykjavík City Council, in coalition with the Progressive Party? I thought not.

[If you’ve just arrived and don’t know what the frick I’m talking about you might want to check out this post.]

Everything about this sale is atrocious. To start with, the majority on the city council presented the sale agreement between Reykjavík Energy and Magma Energy to the minority without giving them any time to read through it. The agreement, however, had been signed a few days earlier and could easily have been distributed among the elected officials well before. When the minority protested and asked for at least 24 hours to read through the agreement and all its associated documents, the majority refused, but did agree to take a break for, oh, one hour, before the debate began.

It is interesting to note that Magma Energy, which is a Canadian company, is registered as a shelf company in Sweden. Why? Because Icelandic laws prevent parties from outside Iceland or the European Economic Area from investing in Icelandic energy companies. That’s because the stakes are just too high – the citizens of this country cannot afford to lose control over their resources. Because a country that gives away its resources will soon become enslaved. Colonized. No longer free.

So the company that is now buying that big share in HS Orka [and will no doubt merge with the other owner – Geysir Green Energy – in due course, giving it full control over the company and the geothermal energy fields for the next 130 years] is a shelf company, set up for no other reason than to circumvent Icelandic law. Interesting that a company in public ownership – Reykjavík Energy – should enter into such an agreement, don’t you think?

As if that were not insulting enough, the agreement between HS Orka and Magma is tailor-made to pander to the buyer. First of all, Reykjavík Energy IS LENDING Magma a full 70 percent of the purchase price, and the loan is A BULLET LOAN, meaning Magma makes no payments until the end of the loan term – seven years hence [apart from the down payment of 30 percent, of course]. Secondly, Reykjavík Energy has no guarantee for the loan except the shares in HS Orka itself – i.e. Magma Energy puts up no collateral. Thirdly, the loan bears interest of 1.5 percent. ONE POINT FIVE PERCENT! Jeezus – wouldn’t you just love for, say, your mortgage to bear interest of 1.5 percent? Fourth, the loan is in US dollars, so all exchange rate risk is taken by Reykjavík Energy. Since the krona is presently very low against the dollar and can well be expected to rise again within the next seven years, the amount of money that will eventually be paid back will be substantially lower than the amount that was lent.

Moreover, the interest on the loan in case of default is somewhere around 5 percent – which is a pretty damn good interest rate all on its own. So, you know, at the end of that seven years, it might even be worthwhile for Magma Energy just to default. They probably couldn’t get a much better loan deal than that anywhere else.

People: the Mayor of Reykjavík, Hanna Birna Kristjánsdóttir [IP], had the gall to appear on state television, look the nation in its collective eye, and declare that this deal was a very good one for the City of Reykjavík. How can people be so deluded? Assuming she really believes it, that is. Which is questionable. I mean, the evidence is not exactly stacked in favour of that conclusion and, well, she can’t be THAT stupid.

Anyway. It’s demoralizing and sad. These are the same sorts of deals that we saw when the banks were privatized [and look what happened] and when the Kárahnjúkavirkjun dam was built. [Prior to that latter instance, Icelandic authorities sent out a brochure titled “Lowest Energy Prices!!” and the recipients included some of the most morally corrupt corporations in the world. How sad can you get?] In both cases, this country was run by a coalition of the Independence Party and the Progressive Party, who over the last few decades have seemed to base their policies solely on the dollar signs in their own eyes. Fortunately we no longer have those parties in the national government – but they are now running the City of Reykjavík and – well – some things apparently never change.

[UPDATE: There is more to this story in a subsequent post here.]

BOY HAS IT RAINED
Cats and dogs – and birds. This evening when EPI went out to fire up the BBQ he found a dead baby thrush on our balcony. It had clearly hit the window at breakneck speed and splatt died instantly. So sad – it was so pretty! We figure it was blown in on a sudden gust of wind – because we had those today, along with the bucketfuls of rain. Neither of us could bear to throw it in the trash, so EPI went out and buried it in the ground. RIP little thrush. It was mild today, though, and apparently we’re set to have summer temps this weekend. Right now 10°C [50F]. The sun came up at 6.37 and set at 8.09.

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  • me September 11, 2009, 11:16 pm

    Wow, would this sort of deal be done in any 2nd or 3rd world country, many would be very quick with shouting how uncivilised and corrupt they all are … but it seems this very country is run by some sort of mafia.

  • D_Boone September 12, 2009, 12:13 am

    Hmmm…. From the Iceland Review….
    “Stiglitz told Fréttabladid that Iceland’s national resources give the nation its main advantage in regaining its strength, warning against foreign investments in Iceland’s energy market.”

    They cannot say they were not warned… and from a very credible source. Looks like the political process needs to assign them to the dustbin of history 🙂

  • Easy September 12, 2009, 12:47 am

    “but it seems this very country is run by some sort of mafia.”
    Well it IS run by mafia, and the other problem is that it’s filled with sheep, we just follow, we might let a baaah or two out every now and then, but thats all we will ever dare to do, we might write the occational post very angry and patriotic but thats all. Then the party that wants the power will organize us in some “motmæla” (we would never do it if its not organized) we beleve we are so breve, they get the power and we are so happy.

  • Dean September 12, 2009, 2:45 am

    The City power company lends the shady company a large sum at a laughable rate to buy shares in the company itself, with no collateral except the mentioned shares.

    What prize do I get if a few days before Magna defaults, the IP-controlled City council “forgives” the outstanding sum?

  • cactusZonie September 12, 2009, 3:30 am

    “That’s because the stakes are just too high – the citizens of this country cannot afford to lose control over their resources. Because a country that gives away its resources will soon become enslaved. Colonized. No longer free.”

    And then there is the I M F
    Politics and Bankers. …

    And that Icelandic woman that had her credit card reported stolen in a banker set up? Simply for being a reporter ! A classic case of Monetary Corruption !
    http://video.google.com/videoplay?docid=3932487043163636261#

    Get MAD !

  • Dave Hambidge September 12, 2009, 3:43 am

    I am very sad that ‘wasniceland’ has sold off the family silver as if it was brass and I expect things will only get worse, for us all?

    It has been my opinion for many moons that what is happening to Alda and the rest of her nation will be the lot for us in UK as well, and quite soon.

    The Beeb have put together a brief slide show of graphics to help ‘us’understand why near future stonking tax rises and cuts in public spending are inevitable;

    http://news.bbc.co.uk/1/hi/business/8249411.stm

    I truly worry for our futures.

  • JoeInVegas September 12, 2009, 4:23 am

    You thought things would change in politics? It stays the same no matter where you go, the cast changes a little, but everyone is in it for the money somehow.

  • James September 12, 2009, 5:33 am

    I’m surprised Iceland’s national government can’t override the local government in matters of selling state resources. After all, that’s very similar to issuing a state guarantee against those national assets as collateral – and, in Iceland, that apparently requires the approval of national government, parliament, and the president…

  • Andrew nehaul September 12, 2009, 6:47 am

    If this story is correct, then Icelanders in general must be eating too much fish and lost their economic sanity.

  • Ljósmynd DE September 12, 2009, 7:48 am

    It’s really depressing. They just don’t stop trading Iceland’s future for their implied own personal benefits as long as they are not thrown out of office. The whole thing sounds pretty much like an affair in a 3rd world country.

    As mentioned above, just recently Joseph Stiglitz has warned against Iceland selling off its energy resources. So, nobody should say they hadn’t known.

    Presenting this deal as a good one for Iceland sounds like sacasm. It is a strong irony on its own, that the party, which bears the word “Independent” in its name, is always at the frontline, when it comes to giving away Iceland’s sovereignty.

  • Scott September 12, 2009, 10:06 am

    Let me get this straight – the “Independence Party” is the cheerleader for the sale of Iceland´s most valuable resources to foreign parties? Made eerily convenient by the crippling – IP abetted – crisis?

    who votes for these clowns? I mean seriously, who can look you in the eye with a straight face and say these people have a sane vision for the survival of the nation?

  • FRANK LYNCH September 12, 2009, 11:43 am

    Wow ! Sale of the Century. I take it that it’s ok for my pals and me to come to Iceland,break into your homes, steal most of your possessions and the victims will pay us for doing it!
    Methinks it’s time for the Icelandic citizenry to break out the pots and pans again.

    Frank.
    Scotland.

  • hildigunnur September 12, 2009, 12:11 pm

    I’m very afraid this is just the beginning 🙁

    and Scott, the #$”%”&#&£@ IP is actually the biggest party in polls now – my countrypeople seem to be even stupider than I thought!

  • Paul H September 12, 2009, 12:28 pm

    Aren’t the government trying to get Geysir Green Energy’s shares (55%)?
    http://www.icelandreview.com/icelandreview/daily_news/?cat_id=28304&ew_0_a_id=338471
    Or is this now not being pursued?
    I sincerely hope that Iceland retains control over its own resources.
    What else does Iceland have?

  • Baldvin Jónsson September 12, 2009, 12:28 pm

    Thank you so much dear OUR TRULY for getting the word out about this huge huge matter. Once again it seems that our governors plan to follow through with their ridiculous plans, with or without the peoples support.
    This deal that is supposed to go through on our very nest Tuesday, makes the Icelandic saying “A small down deposit and the remain according to bad memory” sound like a good business idea.

  • torsten September 12, 2009, 1:37 pm

    sincere condolences

  • Vinur September 12, 2009, 2:34 pm

    Dear Alda:

    It is depressing to read your writing above; such ignorance.

    The reason why Canadian companies, or other companies outside of EU, are not allowed to invest in Icelandic energy companies is not because Icelanders don’t like Canadian people or have prejudice against non EU people. The reason is that the government wants to have counterparties that are regulated with similar laws to the Icelandic laws in case something goes wrong in an important business like natural resource utilization. Portraying Icelanders as being racistical is a quite sad thing to do.

    Reykjavik Energy (OR) is in a very bad shape financially; banks are refusing to lend money to the company and it is in serious danger of becoming illiquid. The company is not a limited liability company but a coop between Reykjavik City and two other municipalities. If things go wrong Reykjavik City needs to put money into the business; taking it away from the schools and social system that the city is struggling to run in the current recession.

    OR has been trying to sell it’s share in HS Orka FOR 9 MONTHS through a formal sales process. Only Magma submitted a formal proposal. OR is fortunate to have received the offer and being able to divest the shares in HS Orka; reducing related dept 30% instantly and the rest in 7 years time. Are you sure that the krona will be stronger then the today?? I am not.

    This agreement is a very good deal for Reykjavik city and hopefully will make it more certain that you can rely on your children having access to day-care tomorrow, and the day after.

    I then really hope that OR will be converted into a limited liability company ASAP to remove he risk to the people of Reykjavik of having to scarifying public service because of OR selling electricity under cost to large multinational aluminum smelters. After OR has been converted to a limited liability company; it should be split into a generation business, utility business and a natural resource asset company. Reykjavik City should own the utility business and the natural resource asset company. The generation business should be sold ASAP as Reykjavik city should not have equity stuck in some company involved in high-risk geothermal exploration and electricity generation for aluminum smelters.

    Think in context before you write.

  • Vinur September 12, 2009, 2:40 pm

    Scott; there are no natural resource being sold. HS Orka rents access to the natural resources from RB under a 65 years contract and pays royalties annually. Sustainable use of the resource is controlled by the National Energy Auhority.

    RB stands for Reykjanesbaer which is the municipality in the region.

  • Vinur September 12, 2009, 2:42 pm

    Dean: this is the homepage of Magma -> http://www.magmaenergycorp.com/s/Home.asp not exactly a “shady company” but a publicly traded company on the Toronto stock exchange regulated by the Canadian authorities.

  • alda September 12, 2009, 3:21 pm

    Dear “vinur”:

    Having a different opinion than you does not constitute “ignorance”.
    I have a very clear context, thank you much.
    And incidentally, who are you? Would you care to publish your real name so we can see whose interests you are furthering?

  • Kris September 12, 2009, 4:54 pm

    Vinur: My what pointed ears you have!
    Wasn’t Enron also an outstanding corporate citizen? AIG, Lehmans et all. Certainly renting for 65 years is not selling. Maybe you can put a message in a time capsule to your great grandchildren with a description of how you saved this valuable resource!
    One thing I find interesting in Vinur’s comments is that this sale is related to the banking collapse. The loans that were available are no longer there and the city probably took out the same type of loans (variable rates pegged to the Euro or dollar) as many home and car buyers and are on the bring on insolvency. So they now have a massive debit burden. If that is the case, then there is no way to stop the train before it hits the bus. This will be the model for shifting debit obligations. Sell everything you can. But, being both the lender and the seller equals giving it away, as far as I can tell. (Oh, I’m such a simpleton!)
    I think the full catastrophe of IP rule is starting to become apparent.
    PS – A good friend is a corporate lawyer who does mergers and IPOs. There are lots and lots of ways to stash the cash in mergers without anyone knowing the difference.
    Vinur, like the IP should change his moniker. Here is a suggestion: Sau(th)ur. I don’t have an Icelandic keyboard, but you get the idea.

  • kevin o'connor waterford Ireland September 12, 2009, 5:17 pm

    Same old same old,you had the pots and pans thing, There were few new faces shuffled in but how many of the old gang stay right where they were as before.
    Still look on the bright side at least you do not have a privatised railway network with a 1001 different fares like the UK Plc, I actually have the book Dreamland and I was wondering if the DVD of the movie is out with english subs ?

  • Scott September 12, 2009, 6:38 pm

    Vinur, I actually agree with you to some extent, even though you clearly have a well organized PR agenda.

    1) OR has been forced to divest itself of HS Orka, yes. Why? Seems the privitisation-crazed previous administration set up the legal structure such that that public utility could not do something as “radical” as own shares in another power company. So yes, they were forced to divest, which put them in a lousy negotiating position. Good chance for someone to scoop up assets on the cheap. Public to private divestment can be a great opportunity for well connected private hands to make a killing (see: Landsbanki, etc). I can see why you would be such an advocate.

    2) OR is struggling to stay above water, true, because it´s signed some dirt rate contracts with the aluminum companies and the large (foreign) loans it has taken are increasingly difficult to service. Also puts them in a terrible negotiating position. Nice management. If HS was a profitable entity, why sell itself? If it was not a profitable entity, why not? What can Iceland learn from how these public companies have been (mis)managed to avoid having to sell them into private (foreign) hands and incur the additional costs that profit siphoning will take on the cost of living?

    3) Just because an agency exists to oversee something doesn´t mean they do – in general regulatory agencies are in bed with the industries they regulate and may talk tough but in practice let them do as they will (see: US DOE, Forest Service, Dept of Interior, SEC, the g-d Fed, etc etc). If the geothermal fields that are being exploited are showing no drop off in temperature as they are currently being operated, that would be a good sign – is that the case? Is it steady state, which would imply use for future generations in “RB”? Most every field in the world is “mined” on a basis to maximize the economic recovery, and generally falls to some fraction of its initial capacity within the 30 or so year life of the plant. It slowly recovers if extraction stops but this is a process that can take hundreds of years. If energy in the ground is a natural resource, it sounds like the natural resources are being sold – argue if that is a good thing or not for Iceland´s self-determination as you will (they appear to sell plenty of fish and not have a problem with it), but that´s the fact.

    In sum, it is a real shame that this had to happen, but it´s true, Magma is just capitalizing on a long series of failed political and management decisions and will reap the profits in the future. A rather harsh analogy might be to compare it to a tourist in Thailand that pays for the services of some young girl who has been driven to prostitution due to poverty. Not the tourist´s fault that it is so cheap. “It´s just business”. The greater scorn should be for those who manipulated the environment such that these transactions are necessary to survive.

  • Luna Sea September 12, 2009, 10:46 pm

    I am enraged! This is just the beginning. It shouldn’t be long now before the whores in government sell everything of value in Iceland to the highest bidder, piece by piece.

    Perhaps massive protests have the ability to reverse this trend but they’re unlikely to occur. People are complacent and will quickly get used to the idea of privatization and not only cease being outraged but will hardly even notice anymore.

    I live in New York City; I know of what what I speak.

    I am truly sorry for what Iceland’s future holds.

    Peace

  • Ljósmynd DE September 13, 2009, 12:38 am

    Why is it that the language and style of the comments of “vinur” remind me of the propaganda of the last years concerning the “sound fundamentals” of the Icelandic economy? The patronizing attitude has a familiar ring.

    The whole proceedings around this deal seem to follow well known patterns, which have proved disastrous for Iceland in the past. I think, this is not a good deal for Iceland, given the duration and the funding of the deal. Bypassing existing Icelandic legislation by means of a shelf company in Sweden doesn’t provide trust. And just because it is promoted as the only option without any other choice doesn’t make it a good one. I consider it very reasonable, to mistrust anything coming along with this kind of surrounding propaganda.

  • idunn September 13, 2009, 2:56 am

    Lending a large percentage of the purchase price, etc., sounds very much like what Icelandic banks were up to recently.

    Perhaps the answer in stopping such a fraudulent sale lies in the laws it circumvents. If any foreign company, such as Magma Energy, being Canadian, has to do no more than create a shelf company in Sweden, then of what use are Icelandic laws? The deceit and fraud are readily apparent. Would this not be an appropriate time for a lawsuit, and the greater public asking those responsible to explain themselves?

  • Dave Hambidge September 13, 2009, 7:58 am

    As I have noted above, the reality of the deep crisis in UK, so similar in effect and maybe cause as well to the home of Alda, is coming apparent;

    http://www.timesonline.co.uk/tol/news/politics/article6832333.ece

    I have never voted conservative BYW.

  • tom joseph aka tj3 September 13, 2009, 10:55 am

    Well so what are the Icelandic people going to do? This particular deal for geothermal energy tests the boundaries.

    The official rigmarole of city council and the national government is being gamed.

    So I would rudely state that knowing more about the next weird deal and the next new costs and new debts inflicted on the citizens is of no consequence. What is of importance now, is just exactly what are the people of Iceland to do? Anything?

    Here in the USA we have such weird official negotiations. Which is not free market capitalism. It is just bad deals, giving away the resources and wealth of the population. In this casein Iceland giving away the basic heat that earth provides.

    A boundary has been crossed. Past this boundary knowledge is not power. Power is power.

    It is more like wrestling pirates rather than normal democratic election politics.

  • Sigvaldi Eggertsson September 13, 2009, 11:21 am

    I just wanted to make one thing clear, the reason why the stakes OR held in the HS orka are being sold is not the IP wanting to privatize but the EU legislation forcing them to.
    The state, being owners of energy generating companies themselves, could not purchase and nor could other energy companies.
    When no other buyer turns up and you are forced to sell your hands are pretty much tied.

  • alda September 13, 2009, 11:31 am

    Sigvaldi – as far as I’m aware, there was no clear stipulation that the state couldn’t purchase the share. Reykjavík Energy, yes – but not the state.

    Granted, in these troubled times buyers are not on every corner. But why the rush? They had time until the end of the year to sell, and the opportunity to extend that term even further. By then possibly something could have been worked out by the state – clearly the Ministry of Finance was working on trying to find solutions.

    I’m sorry – but everything around this deal just stinks.

    TJ – well, unfortunately “the Icelandic people” are not a uniform whole, and in fact only a small share of the Icelandic people seem to concern themselves with what is happening. The rest are either too complacent, or apathetic, or just don’t care.

  • Sigvaldi Eggertsson September 13, 2009, 12:44 pm

    Alda, the state has the same issues that OR has, they are part-owners of Landsvirkjun and have stakes elsewhere in direct competition so that ruled them out.
    But I have also been hearing disturbing rumours that Magma energy is not quite as much “foreign” investment as we have been led to think ?

  • colin buchanan September 13, 2009, 2:05 pm

    More great reporting, Alda!

    Yes, it’s depressing but an agreement like this simply cannot be binding. These people cannot have the right to sell Iceland’s resources. either it is going to have to be challenged on some constitutional basis or if that isn’t possible it will simply have to be annuled on the basis of the defence of Iceland’s sovereignty and popular will at some point further down the line. You can’t just have what is yours by right, by virtue of being an Icelandic citizen being taken away and given away like this.

  • Magnús Birgisson September 13, 2009, 3:48 pm

    Dear Alda (and others)

    As much as I generally enjoy your writing, I must now, as I have sometimes done on other occasions, put forward my own views wich are conflicting with yours or the majority of your readers.

    The interest rate on the loan of 1,5% in very low. But if you take into account that it’s also pegged to the price of aluminium, it’s plain to see that the actual rate will probably be much higher. Energy prices are expected to go up in the future and so will the price of aluminium and therefore the value of the deal to OR.

    If however, energy prices go down (!) then the deal is even better for OR because they managed to sell out before the price of the company (HS Orka) went down even further.

    When you say the collateral is ,,only” the shares in the company, we must take into account that the ,,company” in this case is an energy producer in Iceland…not a shady holding company. In my mind this is probably the best kind of collateral you can get anywhere. The buyer, in this case Magma, would also lose their 30% deposit. There is also a clause in the contract that says that the buyers are forbidden to take out any dividends out of the company and if dividends are payed out they should be payed into a closed bank account and added to the collateral.

    What more can you ask for ?

    This sale does not constitute the selling of icelandic energy resources at fire sale prices. In this case we are probably talking about a fraction out of a 1% of the total energy resources of Iceland. In other words…not terribly much. Also….HS Orka lost 12 billion icelandic kronors last year. How much is it really worth today if you deduct debts ?

    Now…we Icelanders are very protective of our natural resources. We eye everyone suspiciously that expresses any interest in investing in anything that has to do with fish or energy. They can lend us!….that’s ok…because if we dont feel like it we simply wont pay back. But investing…that’s a no no. However…we feel entitled to invest in other nations natural resources, either by buying companies (Mecklenburger Hochsiefischerei..), utilization rights (prawns) or development rights (geothermal energy in the Filipines, South America etc.). Being a bigot is not a part of the icelandic vocabulary now is it ?

    The real shame here is that OR bought those shares in the first place, tat a time when asset prices where riding high on the bubble, and financed with foreign debt to boot. We should fire the people who bought….and celebrate those who are selling. I dont know if they are in fact the same people….

    A final point. Our finance minister is of the opinion that we have not run our energy companies terribly well in the past. He even hired a few friends,who are of a similar opinion, to prove this point…at taxpayers expense ofcourse. Naturally they came to the same conclusion as they have often expressed before, see : http://www.fjarmalaraduneyti.is/media/Utgefin_rit/Mat_a_ardsemi_orkusolu_til_storidju_1.pdf

    Now…..given this…isn’t it just a good idea to try and see if Canadians can’t teach us a thing or two about running a geothermal power plant ?

  • Ryan September 13, 2009, 10:53 pm

    What an incredibly racist post. You realise this, don’t you? – that this is nothing but xenophobic racism? Prove me wrong, it looks as though the only crime they’re guilty of is not being Icelandic. It’s simply shocking, you should be ashamed of yourself.

    Ryan O’Connor,
    London

  • Andrés Jónsson September 13, 2009, 11:22 pm

    Vinur:

    I urge you to give your real name.

    If you are indeed connected to the dealings of Magma, OR and HS Orka there is a name for what you are doing. Its called Astroturfing (see http://en.wikipedia.org/wiki/Astroturfing). And its not nice.

  • alda September 13, 2009, 11:34 pm

    Er … think you might be slightly missing the point there, Ryan.

  • RK in Los Angeles September 14, 2009, 1:01 am

    Wow Im practically rolling on the floor laughing at that comment about racism and xenophobia. I sincerely hope it was meant to be funny, cause it is. But if not then let me just say that xenophobia is a really big word and should be used carefully. Its sometimes better to have some kind of grasp of the meaning of words before using them.

    Alda your patience is admirable. How you handle your comment system is beyond me, I would not have an easy time with it.

    Its good to know you have Vinir. Who needs enemies…

  • Ljósmynd DE September 14, 2009, 6:42 am

    The comment of Ryan reminds me of the anti-Icelandic comments on Reddit in connection with the translation of the article Eva Joly wrote in Iceland’s defense. People with little understanding, biased views or just not caring about any facts just let their prejudices take its course. If one would care to read this post more carefully or any other post of this blog with some understanding, then it is more than clear, that this statement is not only insulting but totally amiss.

    It is pretty obviously stated in the post, that this deal has similar characteristics to the privatisation of the banks and the building of the Kárahnjúkavirkjun dam – which were Icelandic affairs. This is about the fear, that – once again – profits from public resources are siphoned off by private companies (Icelandic or non-Icelandic) instead of having the Icelandic public participate. And this fear is very justifiable.

  • tom joseph aka tj3 September 14, 2009, 11:31 am

    If the Icelandic people like this deal or not I think is still an open question. Apathy and non-involvement one way or the other will not safeguard their interests.

    As you say Alda Icelanders are not a unified whole. Same here in the USA. It does not require a whole population not even an electoral majority to keep the deals safe.

    But it does take a decent percentage of a population involved to counter questionable deal making. It is a year now since the USA had its financial meltdown, little has been done to reform our system. What was done was to pump vast trillions of US dollars into the bubble. We citizens watched buyouts and and renamings and we were on the hook for the debts and risks incurred, we still are.

    None the less it is not a racist thing to guard the interests of ones place in the world. It is not really politics and finance. The principle “pirates” have very real advantages over apathetic citizens. Their primary advantage is they can pay, day in and day out, for someone else to do their fighting for them. Then they can go lounge and count their gold in peace while sipping tasty drinks.

    A shell company in Sweden as a legal dodge for a Canadian company is part of that “pay for play” that a complacent population cannot counter, without giving up the bliss of pretending they are not being robbed in some nice way.

    “You have to sell off local energy companies because….” These are arrangements smart guys make with retarded people to take advantage of them. Just sign here.

    I know I am being very harsh, I apologize.

    I am learning a lot from these comments on The Iceland Weather Report, I am learning which way the wind blows. The discussion is informative and applies way past the locality of Iceland.

  • hildigunnur September 14, 2009, 11:37 am

    Ryan, eh no! It’s the privatization that’s the problem – if the people behind Magma Energy are actually some of our own hated moneyswindlers everybody would be that much more angry.

  • Melvin Godfried September 14, 2009, 11:47 am

    They wouldn´t even attempt this in Nigeria! Break out the tar and feathers!

  • Finnguy September 14, 2009, 12:15 pm

    “Thirdly, the loan bears interest of 1.5 percent. ONE POINT FIVE PERCENT! Jeezus – wouldn’t you just love for, say, your mortgage to bear interest of 1.5 percent?”

    Actually I have lower than that. It’s tied to euribor.

    Yes, I do love it.

  • Alexander E. September 14, 2009, 6:01 pm

    2 Vinnur and Magnús Birgisson

    Nice try indeed.
    And thanks for the proof that HS Orka to Magma Energy deal is exactly what Alda is writing about 😉

  • Estate Taxes November 17, 2009, 3:13 am

    I think this is something to worry about. Quiet depressing right? The problem with privatization is that private companies tend to exploit their resources for to gain profit. It’s just sad to know that resources are are being exploited for the benefit of few people.

  • Bryan Bessette March 22, 2010, 11:38 pm

    This breaks my heart…