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Tuesday, January 5, 2010

Should Iceland pay bank debts with taxpayer's money?

The President of the small North Atlantic country, Olafur Ragnar Grimsson, has vetoed a bill designed to satisfy the blood-sucking international financial institutions such as the IMF and the EU by using taxpayers' money to pay debts acquired by a now nationalized private bank, owed to mostly Dutch and British citizens.

If the bill would be approved, each Icelander would have to pay 12,000 euros on average, for debts they did not generate. I'm not sure how are salaries in Iceland but here it would amount to a full year salary for the typical low wage worker.

In exchange they would get a roughly 10 billion dollar loan. So in exchange of paying more than 5 billion dollars, they'd get a loan that would further indebt the nation. It looks like a total neocolonial scam of the ones the infamous IMF usually organizes.

President Grimsson has yielded to a civic campaign that demands a referendum on the matter. If the bill goes to referendum it is very likely it will be rejected. Logically normal citizens see absolutely no point nor logic on assuming the debt generated by private capitalists.

Source: BBC.


Ken said...

"Logically normal citizens see absolutely no point nor logic on assuming the debt generated by private capitalists"

Their credit rating has been affected
'Fitch, the international rating agency, downgraded Iceland's longterm foreign currency credit rating to junk status on the back of the move and called it "a significant setback to Iceland's efforts to restore normal financial relations with the rest of the world."'

The Icelanders will have to go back to living on fish.

Maju said...

The credit rate of the IFM is about zero and they are still alive and kicking. It's time for debt defaults: fiesta!

I think anyone who dares to confront the IMF has my credit.

The Icelanders will have to go back to living on fish.

Shrug. Not sure what they'll think but fish is good for your heart. Icelanders anyhow have always lived on fish, so what's new about that? They can't live on selling ice cubes, can they?

Anyhow Iceland is still a privileged country with all that volcanic energy gratis in soft manageable form. They don't need to build nukes nor almost buy oil.

They were even investing in data storage, because the cheap energy and cold conditions are ideal for business like those. They are a proud civic-minded republic that will manage one way or another. In the worst case, they can become a financial tax heaven to attract some extra money. And they also have strategic importance, being right at the middle of the North Atlantic. The USA does not want to lose its bases there or that Iceland quits NATO.

They have some cards to play.

Maju said...

Whatever the case, the Icelander case is one that is not really different from the US case and others: why would workers pay with their salaries the abuses and errors of the rich? First expropriate those corrupt bank managers and shareholders, and then we discuss the rest.