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Dear Mrs. Elly Blanksma 

 

I was reading your comments in Morgunblaðið, a daily newspaper in Iceland. 

 

According to Morgunblaðið you view the situation in Iceland as chaotic. I must admit that I find the standpoint of the Dutch more confusing and chaotic than the democracy in Iceland. Of cource democracy can be unpleasant for those in power, those who want the common people to suffer for the incompetence of the ruling class. 

 

While the common people in Iceland was milking cows and fishing fish some Dutch people were doing business with Icelandic gangsters, wanting to profit from high interest rates. This was done with the approval of the Dutch government. Of course somehow the CEO of the central bank in the Netherlands as well as the Dutch authorities concludes that this is the fault of the Icelandic government as if the Icelandic government should have done the job for the Dutch government. This I find confusing.

  

However I do not believe that the common Icelandic taxpayer took any part in these dealings. All the same there are those that think that the common people should not have a say in what sort of society they want to live in. That the peasant or the fisherman should bow to sacrificing health care and education for their children so that capital owners can in utter carelessness continue to do their business with the certainty that other people will pay for their loss. 

 

It is very clear that the Eu directive stipulates that "that the cost of financing such schemes (deposit guarantees) must be borne, in principle, by credit institutions themselves" which of course raises the question why Icelandic taxpayers should shoulder financing such schemes. 

 

The Dutch government is responsible for allowing the implementation of the Icesave accounts in the Netherlands in May 2008 only few months before the Icelandic financial system collapsed and only a week after Fitch credit agency warned that the Icelandic financial system would take a hard fall.

 

It would be beneficial for learning and for future progress as well as just society if the Dutch government would just admit to its taxpayers how it fouled up in its dealings with Landsbanki.

 

„Sjáumst í réttarsalnum“

Grein eftir Michael Hudson (birt í dag)

Why Iceland Voted ‘No”

Michael Hudson

            About 75% of Iceland’s voters turned out on Saturday to reject the Social Democratic-Green government’s proposal to pay $5.2 billion to the British and Dutch bank insurance agencies for the Landsbanki-Icesave collapse. Every one of Iceland’s six electoral districts voted in the “No” column – by a national margin of 60% (down from 93% in January 2010).

             The vote reflected widespread belief that government negotiators had not been vigorous in pleading Iceland’s legal case. The situation is reminiscent of World War I’s Inter-Ally war debt tangle. Lloyd George described the negotiations between U.S. Treasury Secretary Andrew Mellon and Stanley Baldwin regarding Britain’s arms debt as “a negotiation between a weasel and its quarry. The result was a bargain which has brought international debt collection into disrepute … the Treasury officials were not exactly bluffing, but they put forward their full demand as a start in the conversations, and to their surprise Dr. Baldwin said he thought the terms were fair, and accepted them. … this crude job, jocularly called a ‘settlement,’ was to have a disastrous effect upon the whole further course of negotiations …”

            And so it was with Iceland’s negotiation with Britain. True, they got a longer payment period for the Icesave payout. But how is Iceland to obtain the pounds sterling and Euros in the face of its shrinking economy. This is the major payment risk that is still unaddressed. It threatens to plunge the krona’s exchange rate.

            The settlement proposal did lower the interest rates from 5.5% to 3.2%, but it included running interest charges on the bailout since 2008. It even included the extra-high interest charges that led depositors to put their funds in Icesave in the first place. Icelanders viewed these interest premiums as compensation for risks – that were taken and should be lost by the high-interest Internet depositors.

             So the Icesave problem will now go to the courts. The relevant EU directive states that “that the cost of financing such schemes must be borne, in principle, by credit institutions themselves.” As priority claimants Britain and the Netherlands will indeed get the lion’s share of what is left from the Landsbanki corpse. That was not the issue before Iceland’s voters. They simply aimed at saving Iceland from an open-ended obligation to take the bank’s losses onto the public balance sheet without a clear plan of just how Iceland is to get the money to pay.

            Prime Minister Johanna Sigurdardottir <http://topics.nytimes.com/top/reference/timestopics/people/s/johanna_sigurdardottir/index.html?inline=nyt-per>  warns that the vote may trigger “political and economic chaos.” But trying to pay also threatens this. The past year has seen the disastrous experience of Greece, Ireland and now Portugal in taking reckless private sector bank debts onto the public balance sheet. It is hard to expect any sovereign nation to impose a decade or more of deep depression on its economy inasmuch as international law permits every nation to act in its own vital interests.

            Attempts by creditors to persuade nations to bail out their banks at public expense thus is ultimately an exercise in public relations. Icelanders have seen how successful Argentina has been since it imposed a crew haircut on its creditors. They also have seen the economic and political disruption in Ireland and Greece resulting from trying to pay beyond their means.

            Creditors did not give accurate advice when they told Ireland that it could pay for its bank failures without plunging the economy into depression. Ireland’s experience stands as a warning to other countries about trusting overly optimistic forecasts by central bankers. In Iceland’s case, in November 2008 the IMF staff projected yearend-2009 gross external public and private debt at 160% of GDP – but observed that an exchange rate depreciation of 30% would push the ratio to 240% of GDP, which would be “clearly unsustainable.” But the most recent IMF staff report (January 14, 2011) shows end-2009 gross external debt at 308% of GDP, and estimates end-2010 gross external debt at 333% – even before taking the Icesave and other debts into account!

            The main problem with Iceland’s obligation to Britain and the Netherlands is that foreign debt is not paid out of GDP. Apart from what is recovered from Landsbanki (now with the help of Britain’s Serious Fraud Office), the money must be paid in exports. But there has been no negotiation with Britain and Holland over just what Icelandic goods and services these countries would be willing to take in payment. Already in the 1920s, John Maynard Keynes pointed out that the Allied creditor nation had to take some responsibility just how Germany could pay its reparations, if not by exporting more to these countries. In practice, German cities borrowed in New York, turned the dollars over to the Reichsbank, which paid Britain and France, which paid the money back to the U.S. Government for their Inter-Ally Arms debts. In other words, Germany tried to “borrow its way out of debt.” It never works over time.

                The normal practice would be for Iceland to appoint a Group of Experts to lay out the strongest possible case. No sovereign nation can be expected to acquiesce in imposing a generation of financial austerity, economic shrinkage and forced emigration of labor to pay for the failed neoliberal experiment that has dragged down so many other European economies.

Óbreytt einkunn hjá Fitch

Ríkisstjórnin starfað í andstöðu við jöfnuð og félagshyggju

það er firringin sem blasir við í samtímanum. Með því að setja fólk úr hrunstjórninni í forystu og stökkva ofan í vasa Alþjóðagjaldeyrissjóðsins festi ríkisstjórnin í sessi hugmyndafræði ný-frjálshyggjunnar og ríkisstjórnin hefur starfað eftir hennar.

Kenningar um að allt lagist ef ríkisstjórninni tekst að ávinna sér traust alþjóðasamfélagsins eða að auknar erlendar lántökur og aukin skuldsetning auki traust alþjóðasamfélagsins eru af þessum meiði. 

Þessi ríkisstjórn gefur mannlífinu á Íslandi lítinn gaum. Lítt verður vart við áhyggjur af því að tugir þúsunda flýja land enda virðist eiga leysa vanda ríkissjóðs vegna atvinnuleysis með því að hrekja fólk úr landi. 

Það er þó undarlegt að Bjarni Ben telji sig geta boðið upp á betra. Varla hefur sjálfstæðisflokkurinn látið sig mannlífið í landinu miklu varða og einblínd á bólulausnir sem aldrei vara til framtíðar. 

Aðrir ættu að íhuga sína stöðu

Úff, Sylvester Eijffinger fullyrðir að ríkisstjórnin hafi logið

Ráðherrarnir fullyrtu að nægar eignir væru í þrotabúi Landsbankans til þess að ganga upp í kröfur Breta og Hollendinga. En hvað?

Eijffinger telur greinilega ríkisstjórn Íslands lifa í blekkingum. Spurningin er fær Eijiffinger aðrar upplýsingar frá skilanefnd Landsbankans en ríkisstjórn Íslands eða er annar hvor að ljúga. 

Fullyrt er á Facebókinni að Hollendingar hafi hirt minnst 453 milljarða af Kaupþing Edge í Hollandi.
"Hollenski bankin ING tók yfir allar innistæður Kaupthing Edge úr kennitölu fyrirtæki sem
sem bretar höfðu stofnað til að hirða allar eignir Kaupthing Edge." segir en vísað er í þessa frétt The Telegraph.  

Það eru gríðalega miklar umræður í kjölfar NEI og margir stiga fram með ólík sjónarmið.

Ég velti því fyrir mér hvort að ekki hefði tekið við þögn ef JÁið hefði sigrað. 

JÁið hefur verið svolítið í mínum hug leið þagnar og uppgjafar.

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