With Its Economy On The Mend, Iceland Stuffs Bankers For Second Time

Tyler Durden's picture

In a shining example of how it can be done, Iceland, for the second time in as many years, by popular vote refused to provide up to $5 billion to Britain and Netherlands banks. The just completed referendum once again rejected a $5 billion Icesave debt deal, pushed on Iceland by its European banking brethren. "The debt was incurred when Britain and the
Netherlands compensated their nationals who lost savings in online
"Icesave" accounts owned by Landsbanki, one of three Icelandic banks
that collapsed in late 2008."
And while Iceland PM Johanna Sigurdardottir did a brief Mutual Assured Destruction tour claiming "economic and political chaos could follow" we can't help but think we are witnessing the early stages of Europe's most flourishing economy over the next decade, while all other countries in Europe fail one after another due to their inability, unwillingness and cowardice to force bankers to experience, gasp, losses for fear of "reprisals." As for the "isolation" that Iceland is threatened with experiencing should it give banksters the finger, we are certain it is just a matter of a few months before some enterprising hedge funds, scrambling for yield career risk offsets, decide to take on the role of the IMF or of repeatedly insolvent Dexia, and lend directly to Iceland.

From the Sunday Morning Herald:

Icelanders have rejected a depositor claims agreement with Britain and Netherlands for a second time in as many years as voters signalled they did not want tax funds to cover foreign losses by a private bank.

Initial results showed 59.1 per cent of voters said ''no'' to the so-called Icesave agreement, while 40.9 per cent said ''yes'', based on figures published by a regional electorate commission, with about 90 per cent of votes counted.

''This matter will now be settled in the European Free Trade Association's court,'' Prime Minister Johanna Sigurdardottir said.
Advertisement: Story continues below

The government had hoped Icesave would restore investor relations and end the isolation that has stalled Iceland's resurrection from its banking collapse.

M.A.D. - the geyser tour:

 "The worst option was chosen. The vote has split the nation in two," Prime Minister Johanna Sigurdardottir told state television, saying it was fairly clear the "no" side had won.

State television said almost 60 percent of voters had rejected the agreement, based on results from five out of six voting districts, including capital Reykjavik. Many voters were against taxpayers footing the bill for irresponsible bankers.

Just over 169,000 votes had been counted out of the 230,000 eligible voters.

The prime minister, who had predicted a no vote would cause economic uncertainty for at least a year or two, did not say whether the government planned to resign.

"We must do all we can to prevent political and economic chaos as a result of this outcome," she said.

That's the fear mongering... And here are the facts in two easy charts.

Ever since Iceland decided to stop pandering to banker interests, and transfer its country's wealth to banks from Europe and Holland, its economy has in fact been on a constant upward trajectory.

Icelanders are angry:

Icelandic lawmakers in February backed a repayment plan agreed with creditors, but the president refused to sign the bill, triggering the vote. In March 2010, Iceland rejected an earlier Icesave repayment blueprint in a referendum.

"I know this will probably hurt us internationally, but it is worth taking a stance," Thorgerdun Asgeirsdottir, a 28-year-old barista, said after casting a "no" vote.

Svanhvit Ingibergs, 33, who works at a rest home, said: "I had no part in causing those debts, and I don't want our children to risk having to pay them. It would be better to settle this in a court."

Iceland is still pulling itself out of the recession which hit it after its bank crash, and policymakers and economists have said solving the Icesave issue would help the country get back into international financial markets.

Getting such funding is also part of a plan to end the controls on capital flows it imposed in 2008 to stabilise a tumbling currency.

The controls have left an estimated equivalent to a quarter of Iceland's gross domestic product in the hands of foreign investors, many of whom are expected to want to pull out. Ratings agencies follow the vote closely. Moody's has said it may lower its credit rating on Iceland in case of a 'no'.

And so a nation of 320,000 once again takes the baton of bankster liberation, while a country of 320 million continues to refuse to care, even as with each passing month another $150 billion in debt is added to the public debt total.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
King_of_simpletons's picture

I hear UK and Netherland are suing Iceland for their money. HA HA !

masterinchancery's picture

Yes, how is this "court" going to enforce any "judgment." Invade Iceland and confiscate fish?

AG BCN's picture

They will confiscate Bjork.

anarchitect's picture

Yes please.  This would end her meddling with my Magma Energy shares, the insular wench.

Popo's picture

...and yet, Ireland was apparently scared into submission.   Poor dumb Irish.   Slaves to the Brits for the next century... (again).

nonclaim's picture

A simple proposal for Iceland: those that voted for paying the bill should pool together and pay it. Show how it's done but do it with your own money.

anarchitect's picture

Precisely so, as is universally the case in all such things.

Normalcy Bias's picture

They could confiscate Iceland's unfuckingbelievably beautiful women!

Popo's picture

...in their brief golden years before they spontaneously turn into fat grandmothers.

ColonelCooper's picture

We have a lot of that in the upper Midwest, only it's Norwegian/Swedish and German.  You end up with GIANT beautiful strawberry blondes that can kick the shit out of you like they're swatting a gnat.

JoeSexPack's picture

Methinks they got that hot from many severe famines & epidemics in Iceland's history.

If 1/3 of the people die, the beauties are among the last to go.

Rinse & repeat over time to get this:




FreedomGuy's picture

I would just like to see somewhere in some country the bankers and finance people going bankrupt and having their homes foreclosed as the ones who made the bad decisions with terrible consequences. Nowhere have I seen this, yet. What I see are millions of others unemployed, underemployed and taking pay cuts and suffering consequences. Everyone BUT those who created this problem suffer the consequences. That tells me something is profoundly wrong. You don't have to be a dedicated conspiracy theorist to sense something is wrong.

I wish Iceland well and I hope ZH will post articles on bankrupt bankers and financiers...somewhere in this world.

Jack Burton's picture

Amen! When do these criminal bankers lose their asses instead of the average guy taking the hit!

Fíréan's picture

Sone fat cat Icelandic bankers, all with huge finanacial empires and living in London, were arrested some time ago ; included brothers Robert  and Vincent Tchenquiz.


Anyone to follow up on that story ?

FreedomGuy's picture

Fantastic! I would like to see that. I believe that U.S. negligence laws to be very applicable to the financial meltdown we had here in the U.S. and even the world. When "professionals" bought, sold, insured and invested in things they truly did not understand there is a de facto basis for negligence in my mind. As much as I hate lawyers and class action suits there are times for the real thing. Yet, I do not see these and I suspect we are past the point where they could be launched. In fact, there is government complicity as well as protection for these people.

tired1's picture

Have a close look at Russia, some of the bigger guys have fled to the the City of London, one is in prison. It's a start (actually it's where much of this began).

Mike2756's picture

Maybe there is a way for Iceland to turn the volcanoes on, lol. M.A.D. this!

Zero Govt's picture

the Court will hopefully tell the bwankers when they loan money they risk losing it (Buyer beware) ...just like everybody else. Welcome to the real world dirt bags

AnAnonymous's picture


When a third world country performed the same trick as Iceland, they were punished by aggressive privatization of national assets in order to repay the Western involved countries. With the support of Western populations.

Funny how a location can change the perception of an act, in this US world order where supposedly the act is judged with no concern of the doer position.

sun tzu's picture

How is this a US world order? Anyone with a brain knows that London is the world's premier banking and financial center. 

caconhma's picture

" London is the world's premier banking and financial center. "

No shit.

This statement is utterly misleading. The accurate statement should be: London is the leading world's banking center controlled by the criminal Rothschild family and their Zionist associates.


One thing more. The FED is not an American corporation. It is a foreign entity controlled by the Rothschild family from London. America is once again a British colony. So much for American founding fathers and the War for Independence.

Consequently, why should the FED and the Congress give a shit about America and its people? There are no reason for it!

Fiat Money's picture

Here's the head slime-ball of them all, Evelyn de Rothschild, BLAMING EVERYONE BUT HIMSELF and his fellow mega-banksters for the economic crisis, in this short interview with fluff-ball host Maria Bartiromo. 


 EdR is actually very clever with his WEASEL words: "I don't think we shoud be talking about the past"... "the realization that we are all in this together," ..."the need for action must be taken very quickly," etc.

  Note his heavy use of  meaningless assertions ("we must," "we're all in this together," etc.) which lends him an air of reserved dignity while actually saying very little. 

Also note   "you had to face up to the facts that you couldn't let THESE PEOPLE collapse" - by which "people"  he means Mega-Bankers!   He EXPRESSES CONCERN for those who've lost their jobs & pensions... but NOTHING SPECIFIC.   

 He talks about the need for REGULATION, "regulation IS important.. but you have to have the regulators supervised" - without mentioning, that as OWNER of the pretend "moderate"  The Economist magazine, he and his minions PUSHED for DEREGULATION of financial markets, by the TAG TEAM of  rubin, summers, emanuel  "Democrats" and  greenspan, bernanke, geithner, enron ken lay, dick armey, phil gramm, thomas lynch, & jim bliley (et al) republicans,  which "Derivatives," CDOs, and especially Credit Default Swaps were INVITATIONS to  FRAUD,  eg. Golddamn-Sachs selling toxic bonds they KNEW were going to BLOW UP,  but GS taking out CDS contracts with AIG, hoping to double their money from the original fraud sales -  all this de Rothschilds PRETENDS IGNORANCE, as his fellow mega-banksters continue to suck every last drop of nutrients & vitality out of the corpse of the late, great Western democries' economies.

AnAnonymous's picture

Anyone with a working brain shall be able to know that banks are only one component of domination. One needs more attributes than only financial power to achieve hegemony.

Dr. Kenneth Noisewater's picture

When a third world country performed the same trick as Iceland, they were punished by aggressive privatization of national assets in order to repay the Western involved countries.

3rd world country loans were to their spendthrift, crony pinko _governments_, not to their corrupt private banks.  There's no reason that anyone who isn't a share- or bondholder in any of these shit banks should lose a plug nickel.

goldfish1's picture


REYKJAVIK (Reuters) - Iceland faces more economic uncertainty and a drawn-out European court case after its voters rejected for a second time a plan to repay $5 billion to Britain and the Netherlands from a bank crash.

The British and Dutch governments voiced disappointment with the result of Saturday's referendum, in which almost 60 percent of voters opposed the repayment deal.

...The debt was incurred when Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki, one of three overextended Icelandic banks that collapsed in late 2008, triggering an economic meltdown in the country of 320,000 people...

...But voters rejected the idea that taxpayers should foot the bill for what they see as bankers' irresponsibility.

"I know this will probably hurt us internationally, but it is worth taking a stance," Thorgerdun Asgeirsdottir, a 28-year-old barista, said after casting a "no" vote.

A Man without Qualities's picture

The situation with Icesave had echoes of the collapse of BCCI decades ago.  People deposited with Icesave because they paid a much higher rate of interest than other banks, but didn't consider the reasons why.  The funny thing was that just like BCCI, quite a few accounts were those for businesses and local government, where the person responsible was supposed to place in a large UK institution, but secretly put the funds in the higher interest account and pocketed the difference.

However, a big part of the blame should go to the "financial" media - i.e. the "money" sections of the press, that recommended the bank in return for the advertising revenue they got from Icesave, and didn't ever explain the risk or the fact it was not a UK domiciled bank.


Husk-Erzulie's picture

Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki  Why don't I believe this describes even the first sentence of the first chapter of the whole story.

anonnn's picture

...in return for the advertising revenue...

A clever myth!

 The person, a specific human, who makes the  decision what is printed/said in the newspaper, tv program, etc is simply paid-off, well and irresistably, in cash, sex, gifts, career promotion or any of unlimited manner of "favors". Untraceable and unprovable, if done right.





bonddude's picture

Icelandic volcanoes will shit all over Europe in...3...2...1...

unwashedmass's picture

good for iceland!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


DeadFred's picture

Point man is a very dangerous position.  Good luck to them.  I'll be interested to see which scenario plays out.  1 the threats were hollow bogeymen stories and they get away with it. 2 The banksters know it's vital to nip this sort of thing in the bud and pull out the stops to make Iceland into an object lesson for others to fear.  Hope the good guys win.

mick_richfield's picture

Dangerous: true.  But if I had to pick anyone to walk point, the people of the Elder Edda would be at the top of my list.

Doesn't it seem like the big banks would be just the kind of place where Loki would work?

If I were not now here
inside the hall of Aegir,
I would carry thy head in my hand,
and thus would thy lies be punished



cossack55's picture

+14.4 trillion

Thats freakin' it. I am buying a 4' x 6' Iceland flag from an Iceland store and will fly that baby at the top of the pole from now on. I am herby declaring Icelandic Liberty.  Do you think they have a Iceland Gadsden flag with a volcano rather than a snake?

gordengeko's picture

Sweet, tell those King George heirs to fuck off Iceland!

Fix It Again Timmy's picture

FooK You bankers, we will not bail out your stupidity and greed... you go, Iceland!!!

ZeroPower's picture

Ya! You go lefty socialist nut! Free money for ALL! And gold plated food stamps!!

sun tzu's picture

Socialists are the ones that want the bailouts you dumbass jerkoff

ZeroPower's picture

This rhetoric has been spewed before - it was socialist to save GM et al., but its not socialist to redistribute private wealth to the public.

Im all for mandating private corps to clean up their shit, but Iceland is simply a failed case. If the nation will choose to go down this path, the country's lending situation will be similar to Russia during the Ruble Crisis.

I suggest you take a look outside of the box at what refusing to provide the $5Bn will do.. hint: a precedent.


frenchie's picture

how do you call redistributing private losses to the public then ?

pan-the-ist's picture

Because Icebank, a company that does business internationally, lost money in Iceland, the people of Iceland need to pay it back?

If you come to my door and claim that you lost 5bn in my yard and I should pay it back, I would tell you to fuck off.  Privatize gains, socialize lossed eh?