Know When To Walk Away

The current government of Iceland should now just walk away from negotiations.  There never was any obligation for Iceland to pay back the British or Dutch. There is also no will for the Icelandic taxpayers to pay for a debt they now see they don't owe.  The negotiations are over, at least from Iceland's point of view.  Now the British and Dutch have only two options, come to Reykjavík with a deal that says Iceland owes them basically nothing or take Iceland to court. There has never been any desire on the British end to go to court simply because they know they have no legal grounds for a claim against Iceland. So basically, if the government could just stand up against the British and Dutch, the Icesave problem is solved. The British and Dutch can keep the Landsbanki assets, that was the purpose of freezing them in the first place. The worst that could happen from now on is that the IMF won't lend Iceland any more money.  From the stream of foreign experts appearing on Silfur Egils that say Iceland should not assume any more debt, that lack of an IMF loan will be a blessing. As for the fear of becoming a pariah state, watch the interview on Silfur Egils today. http://dagskra.ruv.is/sjonvarpid/4472556/2010/03/14/3/ According to Alex Jurshevski, Iceland is already a pariah due to "no unity in the political system" and "no focus on debt management".  Most fortelling is his comments on Iceland's plan to acquire more debt:

If you take those loans, you will be even less attractive to investors.

This is similar to to what the economist (and Nobel Prize recipient)  Joseph Stiglitz said to Egill Helgason last year. http://www.gregg.blog.is/blog/gregg/entry/958865/ Is anybody in the government listening? Do they have a plan to pay off the money they plan on borrowing? The answer to both those questions is NO. Paying debt by borrowing money sounds like the 2007 way of dealing with the problem. The leaders of the government have learned nothing from the current crisis, except how to repeat the process.

GTB

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Þráinn Bertelsson hafði ekki rétt fyrir sér

Þráinn Bertelsson hafði ekki alveg rétt fyrir sér það eru ekki 5% islendinga sem eru fávitar heldur 1,8% sem eru það.

 

GTB

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