Foreign experts criticize Icelandic government

The parties responsible for fixing the damage done by the economic collapse here in Iceland are the Prime Minister’s office, the Financial Supervisory Authority and the Minstry of Financy. According to various media sources nobody of those parties are taking control and nobody seems willing or able to actually take any decisions. This apparent lack of ability is hampering the recovery and valuable assets are being lost every single day.

The IMF is not happy about this as I have written about numerous times here on this site (search IMF in the search-bar on this site or click here for example) and they are holding back the second payment of the loan promised to Iceland in order to help the nation cope with the financial difficulties. The second payment is being held back because of serious lack of policy. The leaders here do not have a clue on what to do, where to go from here or how to do it. They simply keep arguing among themselves about trivial matters while the nation bleeds.

The IMF is loosing its patience, and the Swedish expert Mats Josefsson, who was hired to help rebuild the Icelandic banking system is threatening to quit the job. He claims that lack of will, fear of decision making and a very slow reaction time of the government offices are to blame.

The agreement with the IMF states that the stakeholders in the banks should be fairly dealt with a while ago. Nothing has happened so far. The new banks should have been refunded by now, nothing is happening. In is three months since this should have been finished and it seems clear that the reconstruction will not be done until late June at least.

Official talks between the banks/government and the stakeholders have been cancelled until then. The new banks are working on a five year business plan that is supposed to be a part of those talks.

The main hindrances on the way to solve the problems are the lack of communications and the lack of political policy when it comes to the future of the nation. No clear government policy when it comes to the matter of the European Union, even though it is very clear that we as a nation simply do not have any other option other than joining the EU. Political bickering is standing in the way of actually solving the problem.

Another matter that keeps things blocked up is the fact that the government seems unwilling to openly admit that the foreign stakeholders will get a part ownership of the new banks.

Mats Josefson said that the banks had not received the cash injection from the government. He also believes the bankrupt companies the banks have to handle, are not being treated the way they should be. Josefson want a separate company to handle the matter, but the banks are doing it themselves. One can only ask why the foreign experts are called in when there seems to be hardly anything done to actually listen to them. They are doing the opposite to what he suggested.

First the IMF and now this Swedish expert. Things are not looking good. Josefson also said that there seems to be little knowledge or understanding on how serious and how tough the problems really are.

According to Morgunblaðið newspaper one of the government staff said that they are not used to such “honesty and directness” like Mats Josefson has shown at meetings.

I for one is happy that someone is tough on them, they seriously need someone to show them what everyone else seems to know, that we are in deep trouble and we need actions to be taken now.

Incredible to say the least.


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