≡ Menu

Icesave talks break down and UK/Holland leak a document

So, Icesave talks between Iceland and the UK/Holland broke down this evening. The Brits accuse the Icelanders of walking out, as per this report from Channel 4 in the UK, which quotes a Treasury spokesman:

The UK and Dutch Governments are disappointed that despite their best efforts over the past year and a half that the Icelandic Government is still unable to accept our best offer on the Icesave loan.We have consistently supported Iceland’s economic recovery and our latest proposal built upon this, offering the Icelandic Government the same interest rate as their current loan from the Nordic countries and, in addition, an offer to waive interest for the first two years amounting to 450 million Euros.

Meanwhile, the Ministry of Finance sent out a generic press release, to wit:

The Government of Iceland today announced that the latest round of talks with the Netherlands and the United Kingdom regarding the Icesave matter have adjourned without a final resolution. Representatives of the three Governments have been meeting in London for the last two weeks.

Icelandic voters will go to the polls on March 6, 2010 to vote on whether to approve the terms of an Icesave deal negotiated with the British and Dutch Governments last summer. The law approving that earlier deal was put to a referendum by Iceland´s President, Ólafur Ragnar Grímsson, on January 5, 2010.

“We had hoped to be able to reach a consensual resolution of this issue on improved terms”, said Steingrímur J. Sigfússon, Iceland´s [God how it annoys me that Icelanders can never get those apostrophes right] Minister of Finance, “but this has not as yet been possible. Constructive proposals were made by both sides during these talks, but significant differences remain. We will now consult with our negociating [sic] team once they are back in Iceland.”

As if the Icesave debacle wasn’t a farce already, it is now so far out that even freaking NASA couldn’t get there. Consider: in nine days’ time we – the Icelandic nation – will face a referendum to decide whether to pass a bill that is worse than a solution that has since been proposed. A bill that is already old news because during the round of talks a couple of weeks ago, the UK/Holland proposed a solution that was marginally better than the one we are voting on.

Is this insane, or what? OF COURSE that bill is going to be voted down. Why would ANYONE in their right mind vote in favour of a bill when they already know that a better deal can be had?

And yet, there is no other bill on the table, so there is nothing else to vote on. But the referendum cannot be pulled because the president promised it to the people, all in the name of this direct democracy that we Icelanders supposedly have in spades.

Holymotherofgod.

That referendum is a big fat waste of time and money. It’s going to get voted down — and then what? The Channel 4 report has a link to a leaked document – a legal opinion written by experts from the European Central Bank, and the European Commission, and seen by Channel 4 news [that] backs the UK and Netherlands position against Iceland.” [They’re pulling out the ammunition now, clearly.]

So will the UK/Holland continue to wield their influence within the IMF and the EU to get Iceland blacklisted? Will there be sanctions against us? Is it back to the turf farms, then?

Interesting times ahead, people. Interesting times ahead.

Comments

comments

Comments on this entry are closed.

  • James Wilde February 25, 2010, 10:58 pm

    I wonder if it occurs to anyone else that the European Central Bank might just be a little biased against the possibility that someone – or some nation – might jib at repaying an unrealistic “debt” before the legality of the debt has been tested in the European Court.

    Or that the European Commission, with its PIIGS*, might just be worried that one or two or five other nations might decide to follow suit.

    *PIIGS = Portugal, Ireland, Italy, Greece and Spain, all of which are in dire economic straits. And they haven’t included the UK, presumably because you can’t add the letters UK to PIIGS and get a word you can say!

  • Laurence February 25, 2010, 11:17 pm

    Did you expect any other outcome?

    Bullies will be bullies, you know.

    Great reporting BTW.

  • Lino February 25, 2010, 11:39 pm

    bang! there goes the Mr Lárus Blöndal’s thesis (
    https://www.ftd.de/politik/europa/:haftungsfrage-island-darf-nicht-einfach-ja-sagen/50077060.html): the opinion seems to address his three points defence, shattering it.

    It is just a legal opinion, and just one of the thousand steps required to bring
    legal guns to bear.

  • Paul H February 25, 2010, 11:40 pm

    Iceland will prevail, period/full-stop.

  • sylvia hikins February 25, 2010, 11:57 pm

    The statement from the UK Treasury also said, ‘we remain committed to reaching a final agreement with Iceland in due course.’ The stand off will go right up to the wire, but I still believe that a compromise will be struck. I also believe that there has been scaremongering around the size of the Landisbank assets. For all its transgression, I understand that Landisbank did not go down the path of junk financing and so its business assets are reasonably solid. These, according to reliable sources quoted in The Guardian, should meet most of the debt, and now that the interest rates have been reduced, what is it that is stopping a deal.?…unless of course, the underlying issue is about sovereign debt…. think where the Blob might take you on that one! Meanwhile in the UK we will probably have an election in 12 weeks. The result could be a hung Parliament. If that happens, it’s likely the IceSave issue will be put well and truly on the back burner.
    sylvia from viking wirral

  • James February 25, 2010, 11:58 pm

    Imagine if the referendum result were yes!

  • Bromley86 February 26, 2010, 12:20 am

    Well, on the plus side, there can’t be sanctions until after a court case.

    Also, plus-siding it again, the good news for Team Iceland is that that opinion is the result of the (aborted!) arbitration meeting back in Nov 2008. It didn’t include the EFTA chappie (but did include the EFTA Surveillance one) and, and this is important, “does not commit their respective appointing authorities”. It’s been on Island.is for, like, forever (ECOFIN section), which makes Channel 4’s keen investigative reporter (“and seen by Channel 4 News“!) look a little less sharp.

    So it’s not the sort of thing one can rely on as gospel. But it is one of the few proper written opinions on the subject, and by a bunch of highly placed EU legal types.

    On the down side, the forecast is for repeated insistences by all parties that it is the other guy who is blocking the IMF loan. Actually that might not be fair as, after the last comedic buck-passing, it seems that everyone settled on:
    – The IMF loan isn’t contingent on Icesave
    – The IMF loan is contingent on the Nordic loans
    – The Nordic loans are contingent on Icesave
    – [And naturally the UK & NL will do their best to obstruct any loans without necessarily coming out and saying that they’re blocking.]

    Good point about the referendum. It’d be a triumph of common sense over the natural order if it was changed to a referendum on the new offer. I know it doesn’t work like that but we all know which way the current referendum is going. Are bookies even bothering to offer odds?

    Finally, I know I’m setting myself and my English teacher (hi Mr. Fanning!) up for a fall, but what was wrong with the apostrophe?

  • Andrew (the other one) February 26, 2010, 12:31 am

    Well the legal opinion is clearly on the side of the British and NL governments for the first 20,000 euros deposited, but doesn’t address the claim by the British and NL governments that Iceland pays up the full amount deposited, so I’d say that negotiations could continue quite easily; I have to say that based on the limited amount of information available to the public, that the British and Dutch are getting exasperated by the negative tactics of the Iceland negotiators, so they are piling on the pressure. They have made some quite significant concessions, but the publicly stated position by Iceland so far has been “not acceptable” without making a counter offer as to what is acceptable. Deliberately annoying the other side is really not a good idea in a negotiation.
    As far as the referendum is concerned, that is now a complete waste of time. The only good thing about having a better offer on the table is that the government might not have to resign after a no vote.

    I am still hopeful of a settlement.

  • Andrew (the other one) February 26, 2010, 12:44 am

    And here is the reason for the rejectionbof the latest offer, as reported by the Financial Times:

    “Iceland rejected the offer on the grounds that the interest was still too high to secure domestic political support for a deal. Icelandic opposition parties have accused Britain and the Netherlands of trying to profit from the country’s taxpayers by seeking an above-Libor interest rate.”

    This is the same interest rate that will be charged by the Nordic countries, when they lend you money! There are several other, quite credible reasons for rejecting the proposals ( the Ragnar Hall issue for one) or negotiating further, but pulling out on this pretext does nothing for the credibility (or consistency) of the Icelandic negotiating position. Or are the opposition parties going to refuse money from the Nordic countries too?

  • Alexander E. February 26, 2010, 2:07 am

    haven’t included the UK, presumably because you can’t add the letters UK to PIIGS and get a word you can say!

    Me thing it will be PENGUINS soon anyway 😉

    James.
    Imagine if the referendum result were yes!

    Imagine no possesions
    I wonder if you can
    No need for greed or hunger
    In a brotherhood of man
    Imagine all the people
    Sharing all the world…

  • kevin oconnor,waterford ireland February 26, 2010, 2:26 am

    @sylvia right on darlin, the nein vote is important this whole thing is as tasty as a rotten icelandic sharks head,what with the investigations etc etc the interest rate and finally the the question what the heck were all those county councils doing up there in the first place,where are all the other countries,you know the type useless Italians,Spanish, thick paddies with an IQ of 20% of an englishman etc etc, the hung Ukplc election, makes you ashamed to be a tory how useless could they be, bring back the demented mad bitch greengrocers daughter and her skinhead on yer bike norm sidekick, dave is too pretty by half, Ukplc not far from ireland not far enough ha ha !!!. there are some frozen assets out there and joe blogs icelander owns them before he has to cough up 12000 euros to the likes of car drivers with less than 20,000 on the clock,keep the red flag flying there comrades.

  • Lino February 26, 2010, 6:34 am

    @ sylvia hikins
    “I also believe that there has been scaremongering around the size of the Landisbank assets”

    book value does not amount to cash, especially in the present conditions: it would take time perhaps years to liquidate assets, costs, uncertainty.
    These liabilities will significantly reduce the “value” of Landisbank assets, probably accounted/acquired at inflated prices.

  • Joerg February 26, 2010, 8:37 am

    It has been my impression for a while – backed by the published legal opinions of some of the Icelandic negotiators – that the objective is sneaking out of a state guarantee altogether and telling the UK/NL to make do with whatever is left of the Landsbanki assets.

    To me this legal reasoning appears pretty weak, apart from the dire practical consequences. But maybe, the Icelandic negotiators are in possession of a superior wisdom.

    Are there estimates available about the costs of this useless referendum? 

  • Eliza February 26, 2010, 8:48 am

    Well it is not only the legal opinion of the ECB and the EU Commission but also of the EU Council and of the EFTA Surveillance Authority. By the way there is no need to be a lawyer to see that the EU directive defines an absolute obligation to put up a deposit insurance scheme, not just a void ‘best efforts’ obligation to set up a bogus fund with a few ISK in it.
    Some fat anglo-saxon lawyers somehow managed to convince the Icelandic government otherwise, collecting by the way astronomous fees.
    Naïve, I think this is the adjective that best defines Nicelanders.
    Not that it is all bad to be naïve, on the contrary, but in the big bad global financial world, quite so.

  • alda February 26, 2010, 12:06 pm

    Naïve, I think this is the adjective that best defines Nicelanders.

    Arrogant, I think this is the adjective that best defines Americans. Rude, I think this is the adjective that best defines the French. Repressed, I think this is the adjective that best defines the British. Belligerent, I think this is the adjective that best defines the Germans.

    See anything wrong with this picture?

  • alda February 26, 2010, 12:10 pm

    This is the same interest rate that will be charged by the Nordic countries, when they lend you money

    — Hm. This blog is not written by “Iceland”. Nor is it read by “Iceland”. So if you want to address “Iceland” this is not the right forum.

  • Laurence February 26, 2010, 12:53 pm

    A question:

    “Under normal conditions, Iceland, a prospective EU member [that signed up to European deposit insurance rules], would have availed itself the right to settle with depositors in an orderly manner. Article 10 of the EU directive 94/19/EC gave Iceland’s…Guarantee Fund (TIF) nine months to settle matters after the failure of a financial institution.” Michael Hudson, Financial Times, Jan 6, 2010

    Yet, the British Government seized Icelandic assets and paid out depositors without consulting the Icelandic govt. And now, Iceland is supposed to cough up.

    Surely the Brits did not follow the correct legal procedures?

    Or am I missing something?

  • Joerg February 26, 2010, 1:14 pm

    Wouldn’t it be far more consequent for the government to withdraw the bill and call the referendum off? Or is it too late for it? If a better offer for Iceland has already been rejected, there isn’t anybody left to endorse a ‘yes’. The government seems to have a credibility problem.

    I think, if I were allowed to vote, I would either cast an invalid vote or refrain from voting at all. There is no point in voting ‘yes’ or ‘no’.   

  • Bromley86 February 26, 2010, 1:35 pm

    Yet, the British Government seized Icelandic assets and paid out depositors without consulting the Icelandic govt. And now, Iceland is supposed to cough up.

    Surely the Brits did not follow the correct legal procedures?

    No, the legal proceedure was fine.

    Iceland had a set period to repay. But, and this is key, it was refusing to acknowledge that it should repay.

    Not just in government-level discussions like the Darling-Mathiesen transcript shows. I watched Geir Haarde deliberately and repeatedly not answer a question about the guarantee with anything more direct than “regretfully I’m not in a position to say exactly what [the level of protection] would be.”
    https://news.bbc.co.uk/1/hi/business/7658417.stm

  • Andrew (the other one) February 26, 2010, 1:55 pm

    @Alda

    Quite right. My apologies, they are not lending you the money!

  • alda February 26, 2010, 2:14 pm

    Andrew – no problem. Just have a slight problem with sweeping generalizations and generic references, you may have noticed. Although no doubt I am guilty of them, myself.

    Bromley – re. the apostrophes — the Icelanders always use the same key on the keyboard that we use for accents above letters. Compare: he´s and he’s. Really gets up my nose, mainly for aesthetic reasons. 🙂

  • Kate February 26, 2010, 2:28 pm

    This “leaked” document has been available for ages I think 🙂
    https://www.island.is/media/frettir/31.pdf
    Isn’t that the same one? Or am I just cracking up….

  • David February 26, 2010, 2:41 pm

    Hasn’t this “leaked” document been available for ages?
    https://www.island.is/media/frettir/31.pdf
    Or am I cracking up?

  • Tanya February 26, 2010, 2:49 pm

    “Yet, the British Government seized Icelandic assets”

    No, this is a common misconception in Iceland. The assets were British assets (perhaps you might want to consider exactly whose deposits seem to have gone walkabout). At the time they were frozen the Landsbanki assets were being moved out of the UK so that they would come under Icelandic jurisdiction. With the passing of the Emergency Law in Iceland on 6 Oct 2008 the British wouldn’t have been able to access their own assets. Hence on the 8 Oct 2008 the movements were stopped. Please remember that the British freezing order was made in direct reponse to the Icelandic change in law.

  • Pieter van Pelt February 26, 2010, 2:52 pm

    Now that the chips are down (or not down?) and a referendum a few days away, this is not the time for Iceland to become ‘sharp’ in re-negociating the deal with NL/UK.
    First, @Bromley: you’re quite right. The legal obligation for the Icelandic guarantee-fund to compensate savers for 20,000 Euro could not be met for the simple reason that there was by far not enough money in their coffers to pay out. Mr Haarde knew this very well but could hardly admit this fact. So he danced around the bush when asked.
    So, @Laurence: It became quickly crystal-clear that the Icelandic authorities could not and would not compensate the NL and UK savers, not in a hundred years. The UK move to freeze Icelandic assets was based on the Icelandic attitude towards their obligations.

    In the end, I am afraid Iceland can kiss a EU membership goodbye for a good many years. Sorry for that. And Iceland may become a paria in the world, like countries as Myanmar, North-Korea or Somalia. Too bad.

  • James Wilde February 26, 2010, 3:14 pm

    I’m a bit confused. Somebody managed to get 20% of all Icelanders to sign a request to the President not to ratify the Icesave agreement. That’s the equivalent of about 12 million brits signing or 50 million americans, so it’s not something you can ignore.

    Why can’t the same people organise a petition to the government to stop negotiating and start investigating the possibility of a case in the European Court?

  • Lino February 26, 2010, 3:39 pm

    “Naïve, I think this is the adjective that best defines Nicelanders.

    Arrogant, I think this is the adjective that best defines Americans. Rude, I think this is the adjective that best defines the French. Repressed, I think this is the adjective that best defines the British. Belligerent, I think this is the adjective that best defines the Germans.

    See anything wrong with this picture?”

    temper temper… Eliza is right, in its own way, and she has been diplomatic.
    The proof is not only the recent past that led to the current predicament, even now Icelanders behave lacking realism and in denial…
    Facts should worry more than words, the rest is for figleafing: Iceland has BIGGER problems than fretting on “naive”.

    Besides, sterotypes have some validity meant as weberian types.

    No, I’m not from US, F, UK or D, I’m from a country that has its own problematic stereotypes, probably quite accurate 🙁

    The time now is for cool heads in Iceland, as a collective and as indivuals: look at Greece (as negative example). Well after all they invented tragedy :):):):)

  • Lino February 26, 2010, 3:42 pm

    @Laurence

    “Yet, the British Government seized Icelandic assets and paid out depositors without consulting the Icelandic govt. And now, Iceland is supposed to cough up”

    they could say they acted for “system security”, like Lárus Blöndal said to validate Iceland discrimination between domestic and foreign Icesave sacers 😉

  • Lino February 26, 2010, 3:42 pm

    savers not sacers, dammit my fingers 🙂

  • Lino February 26, 2010, 3:48 pm

    @Bromley86

    “on the plus side, there can’t be sanctions until after a court case”

    right, not EU sanctions at least… and EU machinery is veeery slow…

  • Lino February 26, 2010, 3:57 pm

    @Andrew (the other one)

    “Well the legal opinion is clearly on the side of the British and NL governments for the first 20,000 euros deposited, but doesn’t address the claim by the British and NL governments that Iceland pays up the full amount deposited”

    residually yes, Iceland is not liable for the part beyond the 20.000 euro.

    However Landesbanki, or what is left of it, is.

    I thought UK/NL only asked for Iceland (state) to cover the first 20.000 euro.

    Is Landesbanki Iceland’s? Has it been nationalised (liabilities included)? If yes then Iceland has to answer as well for the part beyond 20.000 euros, but not by virtue of directive 94/19/EC.

  • Laurence February 26, 2010, 4:08 pm

    @Bromley86:

    Not according to what Michael Hudson says. There was no ‘grace’ period. Brits simply paid out British Icesave depositors. Supposedly Iceland had nine months to come up with a solution, but they were never given a chance. Correct?

    You say they were refused to acknowledge that Iceland would pay. Why should they? They had nine months to come up with plan, or not?

  • Andrew (the other one) February 26, 2010, 4:38 pm

    @Alda

    I’m glad you clarified the apostrophe comment, it was the shape of the apostrophe, not the position that was bothering you. That was driving me nuts!

  • Lino February 26, 2010, 4:56 pm

    @Joerg

    “It has been my impression for a while – backed by the published legal opinions of some of the Icelandic negotiators – that the objective is sneaking out of a state guarantee altogether and telling the UK/NL to make do with whatever is left of the Landsbanki assets”

    that is more or less Mr Lárus Blöndal’s thesis (point 1+3 he even suggest, naively, “go to the EU”).

    “But maybe, the Icelandic negotiators are in possession of a superior wisdom”

    I don’t think so but know knows?
    For a lawyer, Mr Lárus Blöndal looks not very sharp/knowledgeable or perhaps he’s is indeed very smart saying whatever his client wants to hear and billing him a fat invoice for that service.

  • Laurence February 26, 2010, 6:20 pm

    @ Pieter:
    “…there was by far not enough money in their coffers to pay out. Mr Haarde knew this very well but could hardly admit this fact. So he danced around the bush when asked.”

    OK, sure. But the fact is, surely the British govt had known this even before the crisis. And, it’s besides the point: the Brits did not follow EU protocol. Attitude has nothing to do with it.

  • Bromley86 February 26, 2010, 6:35 pm

    Laurence
    You say they were refused to acknowledge that Iceland would pay. Why should they? They had nine months to come up with plan, or not?

    Nope.

    Specifically, they “shall be in a position to pay” within 3 months plus, in wholly exceptional circumstances (which this would have been), another 6-9 months (depending on how you read it).
    [94/19/EC, articles 10.1 & 10.2]

    So say they had 9 months to secure financing. No one disputes that. But the responsibility for the guarantee crystalises when the bank bellies up. Iceland was, quite clearly, not accepting that responsibility. They were saying that they’d like to help, but that they had to deal with the domestic situation first before they could guarantee anything.

    They wanted to negotiate their way out of it and therefore decided to admit nothing. Fair enough, but then so was the British reaction.

    Hudson hardly provides an objective analysis of the situation. Iceland was just a convenient platform for him.

  • Lino February 26, 2010, 7:11 pm

    “who knows”, not “know knows”… 🙁 ok it’s friday…

  • Andrew (the other one) February 26, 2010, 7:17 pm

    @Lino

    As far as I can see, the British and Dutch are asking for full repayment of the whole deposit. Effectively, they are demanding to be the highest priority creditor when the assets of Landsbanki are realized. That is definitely a negotiable point!

    Old Landsbanki was nationalized, but there is a new legal entity “New Landsbanki”, and there is a question about the liability of the new bank for debts incurred by the old one.

    I’m not an expert on the law regarding these questions, but again, it seems negotiable.

    The Icelandic negotiating stance seems to be based on the interest rates, not on these points.

  • Joerg February 26, 2010, 8:50 pm

    @Lino

    I had hinted to this article on ftd.de in a comment to a post on IWR a couple of days ago, mentioning that Lárus Blöndal is not just a common lawyer but – according to an article on Icelandreview – member of the Icesave negotiating commitee on behalf of the opposition parties (I couldn’t find this article in English by now). His position is falling far behind what I thought had been consensus among Icelandic politicians. That is, why I begin to question the sincerity of the Icelandic negotiators. The fight about Icesave within Iceland has been very introversive over the last year and a half. Maybe I am mistaken but it looks like scorched earth tactics of some of the negotiators.

  • Lino February 26, 2010, 11:09 pm

    @Andrew

    “As far as I can see, the British and Dutch are asking for full repayment of the whole deposit. Effectively, they are demanding to be the highest priority creditor when the assets of Landsbanki are realized. That is definitely a negotiable point!”

    for the first 20000 euro they do not even need to have be the highest priority creditor, since “they” (Icesave UK and NL savers and, for the way their government have acted, UK anf NL in their place) are supposed to be covered by the 20000 safety by virtue of directive 94/19/EC.

    Actually it is even counterproductive to wish for highest priority creditor status for the 20000 since they can (and have the legal right) exact the sum with “100%” certainty and “quickly” according to directive 94/19 from the icelandic state instead of waiting an hypothetical, late, messy and uncertain winding down of Landesbanki assets.
    For that sum, Iceland CANNOT say “listen , wait until we have recoved money for Landesbanki”: it is up to Iceland to recover the 20000 part from Landesbanki later… eventually, if and when.
    And if unable to recover that sum, the worse for Iceland: it’s the role of last resort guarantor

    “Old Landsbanki was nationalized, but there is a new legal entity “New Landsbanki”, and there is a question about the liability of the new bank for debts incurred by the old one”

    VERY tricky, you cannot sponge liabilities like that: not even a “bad company” vehicle keeping the bad debts in order to create a New Landesbanki “free” of liability? It’s not a small question, it is THE question: who inherits the liabilities of old Landesbanki? By definition of nationalisation, the Icelandic government.

    Unless Iceland declared “bad debt? It went to bad debt heaven…” 🙂 vindicating the icelandic idiotic mogul saying the same about the siphoned money… 🙂

  • Lino February 27, 2010, 12:11 am

    @Joerg

    “That is, why I begin to question the sincerity of the Icelandic negotiators”

    ha ha ha you are very generous, or have the gift of understatement.
    I never believed the sincerity of Icelandic negotiators: look at their government and how it behaved from the beginning of this sorry saga, a mixture of ridicule and bad faith!!!

    Perhaps Iceland negotiators are intelligent people (are they?) entrusted with an impossible mission, fighting a wrong and lost war.

    For sure, the time they eventually bought (or wasted) is paid by bad faith that is destroying goodwill (yes, goodwill) that could be extracted otherwise: delaying tactics make sense only for buying time or manoeuvering space to prepare for an alternative strategy or fallback position: I see none.

    Iceland is wasting the diminishing time and godwill it has: what for?
    Delaying the inevitable paying a higher price for it: what for? Just for the sake of staying in denial? Just for the sake of fighting to the last, worthy of a viking saga where everyone dies, children and future included?
    Gimme a break…

  • Andrew (the other one) February 27, 2010, 12:41 am

    @lino

    Unfortunately a substantial part of the Icelandic population do not agree that they are in any way liable for the debt, based on the lack of clarity of the EC directive, and because the banks were privately owned when they collapsed.
    That’s why we have a very messy situation, which I, for one would like to see resolved without further acrimony (two chances of that, fat and slim).
    Calm and focussed negotiation, rather than antagonistic rhetoric ( both sides guilty!) are needed.

  • Andrew (the other one) February 27, 2010, 12:52 am

    In the interests of international goodwill, strike out the word “unfortunately” and replace it with “However”.

    See, I’m toning down the rhetoric. I’d actually meant to say “unfortunately for your line of argument”, but my 4 year old son fell off the sofa and banged his head while I was typing, and I had to go and comfort him. When I got back to the computer, I lost my thread and the opening sentence doesn’t read right now.

    Son is okay!

  • Lino February 27, 2010, 1:35 am

    Andrew (the other one)

    “a substantial part of the Icelandic population do not agree that they are in any way liable for the debt”

    denial or bad faith (in attitude and/or willing ignorance): the same chain reasoning I made in this blog could have been made by any instructed icelander, I’m no lawyer neither I have a law degree.

    Icelandic media could have explained clearly and shortly the same chain reasoning I did. If they did not, then it’s systemic denial or systemic bad faith (aren’t icelandic media supposed to inform or just air the convenient news neglecting the unpleasant one?).
    When you have a debate, it’s not just your position you debate, but the other side’s as well… I suppose that in Iceland is the same: don’t they have the “devil’s advocate”?

    “based on the lack of clarity of the EC directive”

    agreed, it’s a piece of boring legislation. However, if they did read it, no wonder it’s “unclear”. How could not, an instructed icelander, read it after it has been mentioned in the press?

    https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31994L0019:EN:HTML

    I do not find it “unclear”. And I did not even read the whole of it… you don’t have to read all of it to understand the aim in general terms: read the preambule, multiple “Whereas…”, and article 3.1 “Each Member State shall ensure that within its territory one or more deposit-guarantee schemes are introduced and officially recognized”. Stop.
    Difficult?

    “and because the banks were privately owned when they collapsed”

    so what? Directive 94/19/EC is about state insurance of saving schemes, irrespective of whether privately or publicly owned.
    State insurance means “guaranteed by the taxpayer”: Icelandic state, icelandic taxpayers.
    It’s not “their” (EU) law: it is Iceland’s (via EEA that Iceland freely and willingly embraced). Don’t they have a tenet in icelandic law that “ignorance of the law is no excuse”?

  • Lino February 27, 2010, 1:39 am

    “if they did not read it, no wonder it’s “unclear””… late friday/very early saturday, sorry

  • Joerg February 27, 2010, 8:28 am

    @Lino

    “delaying tactics make sense only for buying time or manoeuvering space to prepare for an alternative strategy or fallback position: I see none”

    I think, there are certain circles in Iceland misusing Icesave for their own purposes, trying to deflect from their failures in the past and regaining power. Many of the same people are most fiercly opposed to Iceland accessing EU. They are holding all of the Icelandic people hostage, stalling any progress, polarizing – at any cost. That’s one reason, why I am not a fan of generalizations about ‘Iceland’ and ‘Icelanders’ – I don’t see it as an amorphous, homogenous mass of people.     

  • James February 27, 2010, 9:31 am

    “a substantial part of the Icelandic population do not agree that they are in any way liable for the debt”

    In which case, let the dispute be resolved via formal binding arbitration or a court case. The alternative of negotiation clearly hasn’t worked.

  • Andrew (the other one) February 27, 2010, 2:21 pm

    @James

    I’m beginning to think that might be the best solution too. Both sides seem to be too entrenched in their positions to reach a compromise.

  • Lino February 27, 2010, 2:29 pm

    “They are holding all of the Icelandic people hostage, stalling any progress, polarizing – at any cost”

    icelanders have let them. And they are letting them again…

    Never torturers without victims willing to suffer. And yes, shame on the political and (economic) crooks, but don’t forget, even greater shame on the idiots that allowed them, actively or passively, to go their way.

    Holding hostage? I see no guns… how?
    “do not protest or we will all drown in chaos and violence”? Violence and chaos can be necessary, and yes, righteous and good.
    Fear of change? The shut up, get shafted again do not dare to complain

    “why I am not a fan of generalizations about ‘Iceland’ and ‘Icelanders’ – I don’t see it as an amorphous, homogenous mass of people”

    I’m, providing you’re consciuos about the limits of generalization.
    In sociology, generalization is a useful tool for describing a phenomena (weberian type).
    Generalization is inevitable, for matters of speed, effectiveness and cost when dealing with a given situation that could not be dealt at all without generalization.

    Take the “beauty” of representative democracy: the winning 51% govern on behalf of the remaining 49% AS WELL. That is generalization.

    En example: on the 300.000 icelanders, suppose I poll 250.000. IF 200.000 meet a certain trait (e.g. naively trusting) then the generalization “icelanders are gullible” is perfectly valid and justified statistically (I’ll gloss on methods for seleting a sample and its level of representation of the whole and the validiy of the test/sample) . Fair to the other 50.000 polled that are smart and skeptical? Probably not. What has fairness to do?

    You want to be fair to the individuals that are not gullible? Then you do not describe icelandic population but individuals, 300.000 of them: and you do not have a nation.
    Imagine governing a nation where every individual had the constitutional right to air his opinion in front of the icelandic parliament for an 1 hour.
    300.000 hours just for hearing. Then of course there would be debate.
    Absurd. So you put in place mechanism to make the whole process more manageable. In short, you generalize.
    You make law? You generalize. You govern? You generalize. You make business: You generalize.

    All this “generalization is bad” is convenient when you want to dissociate the individual responsibility from the collective one, with the aim of figleafing “it’s anyone else fault but mine, not me whatever”.
    When you have 300.000 doing the same “it’s anyone else fault but mine”, I wonder who’s is left to blame? Nobody? 🙂

    An example:
    Italy before WWII, 30 million adoring fascists while they were “winning”. Italy after WWII, 30 million saying “me? I was against war, never been a fascist I was in the resistance…”.
    Italy population before and after WWII? Around 30 million…

  • Andrew (the other one) February 27, 2010, 2:34 pm

    @lino

    The directive doesn’t say that the government of a country is liable for the debt if the deposit insurance scheme has insufficient funds in it to pay the obligations. The British and Dutch position is that the government (in this case Iceland) as the signatory to the agreement is responsible to meet the shortfall.

    However, this is only for the first 20,000 euros. They ate not liable for 100% of the deposit. The British and Dutch want Iceland to pay everything, with interest. Now there might be grounds for saying that the Iceland deposit scheme was completely inadequate and the Iceland supervisory body, which had control in this case, failed to fulfil its role properly. That would seem to be the basis for a court case to recover some or all of the outstanding balance.