No future for Iceland?

The IceSave deal done with the UK and Dutch government is reported here on the Bloomberg website.

Here is a report by the UK newspaper The Guardian about the financial situation up to date.

Then there is the Associated Press article about the West Ham Football Club takover.

The Icelandic government and in fact the Icelandic public has to pay the British and Dutch people 3,25 billion pounds in compensation for IceSave. According to Channel Two news, at least 130 billion ISK was loaned from Landsbanki went to the Icelandic business men that drove the economy to its knees. Most of the money went to Baugur or companies related to them, and the other part went to the former owners of Landsbanki.IceSlave

An example of this are the loans to Novator owned by both Bjögólfur Jr and Sr, who owned Landsbanki. Novator Pharma got a 200 million Euros on loan from the London branch of Landsbanki  to buy the pharmaceutical company Actavis that now sits up with the debt.

Landsbanki is supposed to own assets that should cover 95% of the debt. Many don’t believe this to be true, and therefor all the money that cannot be collected by selling assets will fall on the Icelandic taxpayer. No details of those assets have been released and the doubt lingers. Many actually believe that some of those assets have been mortgaged more then once. That means that other stakeholders can claim their money back, money that is currently promised to the IceSave loan. If that will be challenged by those other stakeholders the government will most likely loose that case in court. More would then fall on the shoulders of the Icelandic taxpayers.

The debts will cripple the economy and the society for years, even decades to come. People are angry, they don’t think it is fair that they should pay for a private company that messed up. The company was allowed to do this by the Icelandic government, but the British and Dutch financial authorities agreed to this, knowing only to well that the Icelandic system was weak and in serious danger. That is especially true about the Dutch government since the IceSave was only open for a few months there.

The loan has 5,5% interest rates. Daniel Gros the chairman for the European Think Tank, Center for European Policy Studies in Brussels says the interest rates way to high. Gros says that the interest rates are dangerous for Iceland and and this is not a good deal for the nation. He also thinks that no other nation in the world has as much foreign debt as Iceland after this deal.

People ask, correctly so, where the responsibility of the local (UK and Dutch) financial authorities should hold any of the responsibility for allowing this to take place.

Examples from the blogsphere: “Absolute horror, why are none of the assets of those individuals who are to blame FROZEN?”

“People are surprised that the Brits wont take the assets when offered”

“People want justice and not to crumble over claims and financial burdens put on them by those criminals. What is the government thinking??”

“One can only think that the whole society is crumbling to the ground completely, and that we should just sail through it on the god damn silence towards the public. It does not matter what political party is in control, the public is kept out of the loop”

“The question is when will the citizens take matters into their own hands”
Ice Slave they call them. A nation in slavery for years to come.

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