Iceland's president has called a referendum on the latest plan to repay the UK and Netherlands the 4bn euros (£3.1bn) they lost when the Icesave bank collapsed.
President Olafur Grimsson said the new deal, which was approved by parliament last week, requires public approval.
It is the second time in just over a year that Mr Grimmson has vetoed an Icesave deal and demanded a referendum.
Prime Minister Johanna Sigurdardottir has said the move is "disappointing".
Last week, Iceland's parliament overwhelmingly voted in favour of the deal, and voted down by a slim majority the idea of putting the issue to a referendum.
The money will be used to repay the UK and Dutch governments for reimbursing 400,000 citizens who lost savings when Icesave's parent, Landsbanki, collapsed late in 2008.
'Not common' "The citizens of Iceland will get to vote on these new Icesave contracts," President Olafur Grimsson told reporters in Reykjavik on Sunday.
"These (Icesave) contracts are different from the last ones that were put to the nation," Mr Grimsson said.
"It is important that the nation again will get its say," he said, adding that "nearly half of parliament" wanted it to go to a public vote. 400,000 British and Dutch depositors were initially left out of pocket when Icesave collapsed
Mr Grimsson has said recently that the latest deal was much better than the previous one, which was rejected by 93.2% of Icelandic voters in a referendum in March 2010.
Prime Minister Sigurdardottir said she was "disappointed" by the decision, saying: "We had anticipated that the president would sign the Icesave bill".
"This bill got a majority in parliament and it is not common that the president rejects a bill with such a majority.
"I don't think there is a big chance that Britain and the Netherlands would be willing to sit down and negotiate again," Ms Sigurdardottir said.
Banking crash Under the terms of the latest deal Iceland will have longer to repay, and at a lower interest rate than before.
Iceland will pay the money back to the UK at a 3.3% interest rate between 2016 and 2046, rather than a 5.5% interest rate between 2016 and 2024.
The actual cost to the state is expected to be much less than the 4bn euros owed, as the government says most of the repayment will come from selling the assets of Landsbanki.
The government has said the cost could be a maximum 50 billion crowns (£265m).
Iceland's three main banks collapsed within days of each other in October 2008. Iceland compensated its savers, but overseas savers faced losing all of their money.
The issue of repayments created a diplomatic row between Iceland and the UK, as well as political controversy in Icesave's home country. It also created uncertainty over Iceland's economic recovery.
Atli GÃslason and Lilja Mósesdóttir, both MPs for the Leftist-Greens, have announced that they are leaving the party. Other members of parliament that Eyjan has spoken to have expressed surprise at the move, which puts the government in a very tenuous position.
RÚV reports that at a press conference held just moments ago, the two cited long-standing disagreements with the government, and that the tipping point had been over the latest budget bill. They have said that they cannot support the government unconditionally, and have been disappointed with what they see as the government not doing all it can to defend the social welfare system.
The two have been associated with the so-called "unstable division" of the party - MPs who have disagreed with the party over major issues. In particular, Icesave has been an area of contention within the party, as has the EU question and cuts made to social programmes.
The move puts the ruling coalition of the Social Democrats and Leftist-Greens in a somewhat tenuous position. The majority appears even weaker when taking into account Ãsmundur Einar Daðasson, another Leftist-Green MP associated with the "unstable division", who has voted with the opposition in the past.
There have also been rumours that the coalition will not hold, but rather that the conservatives and Social Democrats will form a new coalition. This has not yet been confirmed nor denied, but the government's position is certainly unstable.
UPDATE: Smugan has released the joint statement of Atli and Lilja, which reviews the areas of disagreement the two have had with the Leftist-Greens. As stated, most of these disagreements have been over the budget, Icesave, the EU, and the IMF. They conclude: "We do not intend to work in an environment that questions our work and hinders our freedom of expression. By that we mean both our own party and the leadership of the government. ... We do not trust ourselves to unconditionally support the government any more, nor bear responsibility for their platform and work habits. We will, on the other hand, continue to defend the platform ideals of the Leftist-Greens and work in their spirit, both within the party and in parliament." http://grapevine.is/News/ReadArticle/BRE...-The-Party
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
http://mirror.wikileaks.info/leak/kaupthing-claims.pdf
This document contains a list of 28167 claims, totally 40 billion euro, lodged against the failed Icelandic bank
Kaupthing Bank hf. The document is important because it reveals billions in cash, bonds and other property held
with Kaupthing by wealthy investors and asset hiders from around the world, including Goldman Sachs, Deutsche
Bank, Credit Suisse, Morgan Stanly, Exista, Barclays, Commerzbank AG and a vast number of others.
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
Magda Hassan Wrote:http://mirror.wikileaks.info/leak/kaupthing-claims.pdf
This document contains a list of 28167 claims, totally 40 billion euro, lodged against the failed Icelandic bank
Kaupthing Bank hf. The document is important because it reveals billions in cash, bonds and other property held
with Kaupthing by wealthy investors and asset hiders from around the world, including Goldman Sachs, Deutsche
Bank, Credit Suisse, Morgan Stanly, Exista, Barclays, Commerzbank AG and a vast number of others.
Aka a list of the new slave masters, using shock therapy electrodes rather than branding irons on their property:
"It means this War was never political at all, the politics was all theatre, all just to keep the people distracted...."
"Proverbs for Paranoids 4: You hide, They seek."
"They are in Love. Fuck the War." Gravity's Rainbow, Thomas Pynchon
"Ccollanan Pachacamac ricuy auccacunac yahuarniy hichascancuta." The last words of the last Inka, Tupac Amaru, led to the gallows by men of god & dogs of war
Icelandic Anger Brings Debt Forgiveness in Best Recovery Story
By Omar R. Valdimarsson - Feb 20, 2012 11:01 AM ET
Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country's economic and financial collapse are reaping the benefits of their anger. Since the end of 2008, the island's banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.
A cyclist passes an Icelandic national flag hanging in a popular shopping street in Reykjavik, Iceland. Photographer: Paul Taggart/Bloomberg
"You could safely say that Iceland holds the world record in household debt relief," said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. "Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that." The island's steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland's economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don't want to join the European Union, where the debt crisis is in its third year. The island's households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.
Crisis Lessons
"The lesson to be learned from Iceland's crisis is that if other countries think it's necessary to write down debts, they should look at how successful the 110 percent agreement was here," said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. "It's the broadest agreement that's been undertaken." Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said. Iceland's $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates. Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island's "unorthodox crisis policy response has succeeded."
People Vs Markets
Iceland's approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn. Once it became clear back in October 2008 that the island's banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed. Activists say the banks should go even further in their debt relief. Andrea J. Olafsdottir, chairman of the Icelandic Homes Coalition, said she doubts the numbers provided by the banks are reliable. "There are indications that some of the financial institutions in question haven't lost a penny with the measures that they've undertaken," she said.
Fresh Demands
According to Kristjan Kristjansson, a spokesman for Landsbankinn hf, the amount written off by the banks is probably larger than the 196.4 billion kronur ($1.6 billion) that the Financial Services Association estimates, since that figure only includes debt relief required by the courts or the government. "There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine," Kristjansson said. "It's nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action." As a precursor to the global Occupy Wall Street movement and austerity protests acrossEurope, Icelanders took to the streets after the economic collapse in 2008. Protests escalated in early 2009, forcing police to use teargas to disperse crowds throwing rocks at parliament and the offices of then Prime Minister Geir Haarde. Parliament is still deciding whether to press ahead with an indictment that was brought against him in September 2009 for his role in the crisis. A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.
Legal Aftermath
Iceland's special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges. Larus Welding, the former CEO of Glitnir Bank hf, once Iceland's second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues. That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown. The U.S. subprime crisis sent home prices plunging 33 percent from a 2006 peak. While households there don't face the same degree of debt relief as that pushed through in Iceland, President Barack Obama this month proposed plans to expand loan modifications, including some principal reductions. According to Christensen at Danske Bank, "the bottom line is that if households are insolvent, then the banks just have to go along with it, regardless of the interests of the banks." http://www.bloomberg.com/news/2012-02-20...story.html
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
The national court has found former prime minister Geir H. Haarde guilty of one charge of four of negligence and mismanagement during his time in office, contributing to the economic crash of 2008. He will not be punished, and the state is to pay for his legal expenses.
Just moments ago, RÚV reports, he was found guilty of one of the four charges of negligence levied against him. In particular, the charge is that he either knew or should have known that he had to respond in some way to the information he had been receiving that the economy was unstable.
However, as VÃsir reports, he will not receive any sentence - whether prison time or a fine - for the charge he has been convicted of. Furthermore, the Icelandic government will have to pay for his legal expenses, which total 24 million ISK.
As reported, the Special Investigative Commission report on the causes of the economic collapse singled out, among others, Geir as a negligent prime minister who ignored warnings that the economy was at the breaking point, and who was frankly terrified of former Central Bank chairman DavÃð Oddsson. Parliament narrowly voted to press charges against Geir, and determined that he must stand trial.
The trial, held throughout the spring, featured numerous witnesses coming to testify, including DavÃð Oddsson. Prosecutor SigrÃður Friðjónsdóttir concluded her final arguments by stating that when it comes to the personal responsibility of a government minister, the law is clear. Geir had many opportunities to step in and prevent disaster, she said, all of which he chose to ignore. Andri Ãrnason, Geir's defence attorney, argued on the other hand that many matters were kept deliberately hidden from Geir until it was too late, if they were revealed at all.
The full 500-page version of the national court's decision will be posted on theirwebsite later today.
Quote:he will not receive any sentence - whether prison time or a fine - for the charge he has been convicted of. Furthermore, the Icelandic government will have to pay for his legal expenses, which total 24 million ISK.
Another taxpayer funded bailout for the criminals.
"It means this War was never political at all, the politics was all theatre, all just to keep the people distracted...."
"Proverbs for Paranoids 4: You hide, They seek."
"They are in Love. Fuck the War." Gravity's Rainbow, Thomas Pynchon
"Ccollanan Pachacamac ricuy auccacunac yahuarniy hichascancuta." The last words of the last Inka, Tupac Amaru, led to the gallows by men of god & dogs of war
With all votes now counted from last Saturday's referendum, the majority of Icelanders have voted in favour of having a new constitution, including a number of significant changes.
Iceland's original constitution is more or less borrowed from the Danes. In the wake of the 2008 economic collapse, a public outcry to change the very structure of Iceland's socio-political system led to an initiative to write a new constitution. This led to the formation of a Constitutional Council. The council - comprised of 25 men and women from around Iceland, and appointed by the Prime Minister for the task - have been working on writing a new constitution for Iceland.
The council has been posting their progress on a website, inviting comments from the general public on what changes they would like to see, or what changes the public would like made to new constitutional articles that the committee has drafted.
Last Saturday, a referendum was held on six important questions related to a new constitution - including whether or not the constitution should be changed in the first place. The results are now in, RÚV reports, with the majority of Icelanders approving not only a new constitution, but also some changes to their society.
The results are as follows:
1. Do you wish the Constitution Council's proposals to form the basis of a new draft Constitution? Yes: 66.3% No: 33.7%
2. In the new Constitution, do you want natural resources that are not privately owned to be declared national property? Yes: 82.5% No: 17.5%
3. Would you like to see provisions in the new Constitution on an established (national) church in Iceland? Yes: 57.5% No: 42.5%
4. Would you like to see a provision in the new Constitution authorising the election of particular individuals to the Althingi more than is the case at present?Yes: 77.9% No: 22.1% (This question pertains to the ability of unaffiliated politicians, or those from smaller parties, to run for parliament.)
5. Would you like to see a provision in the new Constitution giving equal weight to votes cast in all parts of the country? Yes: 65.5% No: 34.5%
6. Would you like to see a provision in the new Constitution stating that a certain proportion of the electorate is able to demand that issues are put to a referendum? Yes: 72.8% No: 27.2%
Of the 236,941 in Iceland with the right to vote in this election, 115,814 took part, giving a turnout of 48.9%
Not everyone has been excited about the idea of a new constitution, though - the Independence Party has been decidedly against the idea. Birgir Ãrmannsson, an MP for the Independence Party, told VÃsir that the results show the turn-out was small, which he believes casts doubts on whether or not the people actually want a new constitution.
Prime Minister Jóhanna Sigurðardóttir said that she believes the election results send a "clear message" for a new constitution.
"I am very proud that the people should send parliament such an unreserved message," she said. "Here, important issues that have long been in the public discussion were put to a vote."
Indeed, the separation of church and state, as well as the ownership of natural resources, have been contentious issues in Iceland for a long time now. The "equal weight" question has also been much debated - as it is, votes cast in the countryside are counted as slightly more than one vote. Unsurprisingly, many living in the countryside voted against this question.
Iceland recently held elections and there is a new government. Unfortunately it is the same one that caused all their troubles before:
Quote:Iceland's centre-right opposition has declared victory in parliamentary elections, as voters punished the incumbent leftist government for harsh austerity measures during its four years at the helm.They will now form a coalition government after a count of 45 per cent of votes suggested the rightwing Independence Party would get 21 seats in parliament, with the centrist-agrarian Progressive Party set to double its seats to 18. It marks a return to power for the two parties, which both want to end the Atlantic island nation's European Union accession talks. The Independence Party's leader Bjarni Benediktsson told supporters he was ready to negotiate a coalition that would lead the country. "[We are] called to duty again. The situation now calls for change," Mr Benediktsson said. The two parties have staged a remarkable comeback since they were ousted in a 2009 election after presiding over the worst financial crisis to ever hit the small country. Before the crisis the mortgages offered by Icelandic banks were linked to inflation, resulting in spiralling borrowing costs for homeowners when the krona collapsed against other currencies. After four years of tax hikes and austerity designed to meet international lenders' demands, the Independence Party has offered debt-laden voters tax credits. The Progressive Party, a historic coalition partner to the Independence Party, has vowed to go even further by asking banks to write off some of the debt. "We will change Iceland for the better very fast in the coming months and years," said the party's leader, Sigmundur David Gunnlaugsson. The biggest party traditionally picks the prime minister and polls in the final weeks of campaigning had put the two parties neck-and-neck. The incumbent social democratic Alliance Party was looking at a drop in parliamentary seats from 19 to 10. http://www.abc.net.au/news/2013-04-28/ic...in/4655888
On the other hand the Pirate Party did very well too and it is good to see Birgitta still in parliament:
Quote:
Pirate Party wins 3 seats in Icelandic parliament for its best result worldwide
One of the new Pirates, Birgitta Jónsdóttir, has a long history with WikiLeaks.
On Saturday, Iceland held national parliamentary elections and the newly-formed Pirate Party of Iceland won 5.1 percent of the vote. This earned the party three seats in parliament, making the new PÃratar the most successful Pirate Party in any national legislative body around the globe.
Iceland's unicameral parliament, known in Icelandic as the Alþing ("All-thing"), has just 63 members to represent the country's 320,000 people.
By comparison, the Czech Republic has one Pirate Party parliamentarian, Germany has 45 state-level Pirate lawmakers (plus, recent party struggles), and Sweden has two representatives of its Pirate Party in the European Parliament. As is the case anywhere Pirates hold elective office, the group still represents a tiny minority in Icelandmost of the seats in the Alþing will go to the center-right Independence Party. In the United States, the Pirate Party has had very limited success and is extremely unlikely to get elected to either the House of Representatives or the Senate.
The three new Icelandic lawmakers include Jón Þór Ólafsson, a business administration student at the University of Iceland; Helgi Hrafn Gunnarsson, a computer programmer; and Birgitta Jónsdóttir, a well-known WikiLeaks volunteer and former member of parliament from 2009 to 2013.
Birgitta is also one of three activists involved in a WikiLeaks investigation currently underway in the United States. In November 2011, a district court judge found that prosecutors could compel Twitter to give up specific information on the three accounts, including IP addresses, direct messages, and other data. In January 2013, a federal appeals court in Virginia ruled (PDF) that Birgitta and the two others have no right to find out which other companies the government sought information from besides Twitter.
The trio, along with other members of Iceland's digerati (including Smári McCarthy, who also is one of the organizers of the International Modern Media Initiative), founded the party just five months ago. The Pirate Party at large was founded in Sweden in 2006, focusing on a digital agenda including items such as IP law reform and Internet policies
That Iceland is so far the only success story in the continent of Europe, which continues sliding into an ever deeper depressionary black hole, as a result of the complete destruction of its financial sector and its subsequent rise from the ashes, is by known to most. What is still not exactly clear is what conditions have allowed success and growth to flourish in a barren wasteland where 60% youth unemployment is increasingly the norm, and where economic "outperformance" is measured in shades of red. As it turns out, perhaps the biggest jolt to Icelandic economic growth is what we said was the correct prescription for resolving not only the US but global growth malaise that struck in 2008: debt liquidation.
Of course, instead the powers that be opted for merely masking unsustainable debt with more debt in the hope of preserving the global financial equity tranche, where some $50 trillion, or two-thirds of total, in US household wealth is concentrated, by drowning out hundreds of trillions in global debt through controlled debt inflation - which four years later still has yet to take hold, and which with every incremental dollar, yen, franc or pound printed threatens to spillover into uncontrolled hyperinflation, i.e., loss of fiath.
Alas, no debt liquidation is possible without making the equity below it worthless: a fact of restructuring known all to well to most which is precisely why it will not happen as long as the status quo is in control. Yet in those places which dared to bite the bullet and do the right thing - namely liquidate untenable debt - growth is back, and the future is truly bright without everyone asking "just how much longer will a few Keynesian voodoo acolytes provide a reprieve from the poverty effect?."
From Bloomberg:
Iceland's lenders have forgiven household debt equal to about 12.4 percent of gross domestic product since the island's 2008 financial collapse.
Lenders had written off 212.2 billion kronur ($1.7 billion) in household debt through the end of 2012, the Icelandic Financial Services Association said in a letter to parliament. The group estimated a further 35.3 billion kronur will be forgiven this year after they recalculate loan agreements to meet a Supreme Court ruling.
About 141.2 billion kronur of that follows a ruling from the island's top court stating that mortgage loans indexed to foreign exchange rates were illegal, it said.
The island's biggest banks failed in October 2008, after defaulting on about $85 billion in debt. The collapse plunged the island's economy into a crisis that sent unemployment surging nine-fold and triggered a recession.
The association said that of the total, 45.8 billion kronur in private debt was forgiven as part of an agreement that stipulated that debts exceeding 110 percent of a property's value must be written off.
What a novel concept: debt slaves succeeding in, one day at a time, removing their shackles. Or at least being aware of theirdebt serf status: which sadly is much more than one can say about 99% of the remainder of the world's population.
That said, look for debt liquidation to be tried everywhere else eventually... But only after every other mechanism of "inflating" away the debt has failed, and in the process also wiped out not only the global middle class, but the myth of the welfare state.
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
![[Image: _51345758_011327344-1.jpg]](http://news.bbcimg.co.uk/media/images/51345000/jpg/_51345758_011327344-1.jpg)
Mr Grimsson said it was important that the public had its say ![[Image: _50367014_006309936-1.jpg]](http://news.bbcimg.co.uk/media/images/50367000/jpg/_50367014_006309936-1.jpg)
400,000 British and Dutch depositors were initially left out of pocket when Icesave collapsed 
![[Image: iLYqptm0pf_4.jpg]](http://www.bloomberg.com/image/iLYqptm0pf_4.jpg)