Something or Nothing

Össur and Ögmundur should to be commended for telling the British government throught the BBC radio ( http://www.bbc.co.uk/iplayer/console/b00mvd4g )that Iceland wants to pay its obligations but will not be bullied into paying more than it can.  This should serve as a wake up call to both the British and Dutch governments that they have to accept the Icesave agreement as it is with the preconditions attached.  This guarantees that they at least have a possiblility of repayment.  If the two insist on pushing the issue further, the Icelandic government will collapse.  The next government to take its place will kill the Icesave deal completely and then the British and Dutch will not see one Euro in repayment.

 And why should Iceland repay the Icesave deposits anyway?  The Dutch and British are forcing this deal because they do not what to accept their responsibility for the deposits.  After all the saving accounts were approved by their financial supervisory agencies so they have some legal obligation for repayment also. By squeezing Iceland with the IMF loan and EU membership instead of with legal action, everyone can see how weak their own legal arguments are.

It may be better for Iceland if the Icesave deal fell through.  Do not believe the threats that no one will loan Iceland money if this deal is not completed.  That is, for lack of a more succinct word- bullshit. Just listen to what the economist (and Nobel Prize recipient)  Joseph Stiglitz said to Egill Helgason (http://dagskra.ruv.is/sjonvarpid/4472532/2009/09/06/ ). People and institutions that loan money do so to make money.  They are forward looking- i.e. Are you going to pay THEM back? So which is more likely? - Iceland getting credit with little foreign debt and all its assets(workers and machinery) available or Iceland getting credit with a debt 200 times greater that the GDP? It doesn't take a rocket scientist to figure out the answer to this one. 

So the British and Dutch governments, if they want to see any repayment had better back off and accept the deal.  Hopefully they will be the pigheaded idiots they have been so far and will end up getting nothing. Iceland will actually be better off because of it.

 

GTB

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