Iceland government falls

[Magda Hassan]

Iceland government falls. It wont be long before Ukraine, Greece, Latvia, Lithuania join them. Maybe more. There is talk about the UK government going in the not too distant future. Exiled to the Isle of Mann


http://www.smh.com.au/news/world/iceland...79247.html

[David Guyatt]

There is talk about the UK government going in the not too distant future. Exiled to the Isle of Mann

The IoM presumably because they'll be close to their off-shore bank accounts?:deal:

[Jan Klimkowski]

Glitnir recruits Kroll to probe fresh £670m hole in accounts
Glitnir, one of the three collapsed Icelandic banks, has launched an investigation into a missing £670m liability that was not recorded on its balance sheet when it failed last year.

By Rowena Mason
Published: 6:50PM GMT 08 Nov 2009

The bank, which owes £160m to local councils in the UK, plus hundreds of millions more to British charities, universities and private companies, has now asked the financial investigation firm Kroll to begin tracing the money. It is more than a year since the implosion of the Icelandic financial system, but Glitnir has only just discovered the hole in its balance sheet after a single new creditor filed the huge claim against the bank.

The discovery makes it possible that Glitnir's other known creditors, such as Nottingham City Council with £11m and Kent County Council with £14.5m in the collapsed bank, will receive less cash back when claims are eventually settled.

Glitnir refused to disclose the identity of the new creditor, but it is thought to be a claim by a foreign entity. Royal Bank of Scotland, the bank majority-owned by the Government, is understood to be one of its major creditors.

Glitnir already owes an estimated £13bn, suggesting that the extra liability will add 5pc to its overall debt levels. However, the deadline for claims has not yet passed, making it possible that more off-balance-sheet liabilities could come to light. A spokesman for Glitnir's winding-up committee, said the bank does not appear to have recorded the fact that it owed £670m to a single source in a transaction "not conducted in the open market".

He added that it was "not impossible" the amount may ultimately be accounted for, but that it was prudent to launch a full investigation into the circumstances of the liability.

Kroll, which is known for tracing the hidden assets of Saddam Hussain, the Iraqi dictator, was hired by Glitnir earlier this year to start looking into "potential irregularities" in the months before the bank collapsed. The accounting problem comes as Glitnir faced domestic controversy in Iceland over revelations that it had lent money to children to buy shares in one of its units, a small savings bank called Byr.

Glitnir, along with bigger collapsed rivals Landsbanki and Kaupthing, are all under investigation by the Icelandic authorities looking into "suspicions of criminal activity" in the banking sector. The Serious Fraud Office in the UK is also probing links between the Icelandic banks and London, although it has not launched a formal investigation.

Last month, the Icelandic government agreed to hand 95pc of Islandsbanki, a domestic bank created from the ashes of Glitnir, to the old banks's creditors, keeping a 5pc stake for the state.

http://www.telegraph.co.uk/finance/finan...ounts.html

So, there's a £670m liability that was not recorded on Glitner's balance sheet when it failed.

Rumours suggest that the liability may be owed to RBS, a bank now largely owned by British taxpayers.

Icelandic officials hire Kroll, oft described as the "CIA of Wall Street", to investigate.

This could get interesting...

[Helen Reyes]

Iceland government falls. It wont be long before Ukraine, Greece, Latvia, Lithuania join them. Maybe more. There is talk about the UK government going in the not too distant future. Exiled to the Isle of Mann


http://www.smh.com.au/news/world/iceland...79247.html

The Lithuanian pension system today forecast a vast deficit for this year with accelerating deficits for the next 5 years and beyond. The IMF was very active in "pensions reform" in Lithuania in 1999/2000. The birth/death ratio is definitely listing toward the aged, while the self-proclaimed conservative government engages in a subtle form of whipping up anti-Semitic sentiments, despite the almost total lack of any resident living Jews to target. The Latvian economy was almost totally dependent on foreign leveraging and cheap debt.

In better news, Finland, Sweden and some other states have come out in full favor of the Russian natural gas pipeline to Germany via the Baltic Sea bed, and ugly kid Berlusconni is in favor of increased economic cooperation with Russia involving capital projects. That leaves the 3 Baltic states pretty much isolated in their opposition to the free flow of comparatively cheap gas to the EU (they had wanted to set their own transit fees and keep a hand on the spigot as a sort of liberum veto over EU energy policy).

[David Guyatt]

Just how do you accrue a "liability" of almost three quarters of a billion pounds "off balance sheet"? Usually such OBS items are contingent liabilities and have to be noted in the accounts (unless things have changed in the last 20 odd years).

This altogether sounds very fishy indeed - and the whiff of money laundering - as described by former Mafia financier Michele Sindona - is twitching at my nose.

And if RBS is the unnamed creditor does this suggest that they held their contra amount deeply off balance sheet too - as it can't have got lost in their accounts also, as the UK government has been all over them over the last year. Haven't they?

http://themessagenetwork.biz/?p=19918

The Serious Fraud Office in the UK is also probing links between the Icelandic banks and London, although it has not launched a formal investigation.

Wel, old Bill's SFO are so politically controlled that this will probably die a quiet death - but it does seem to suggest that a Brit bank is involved in the above.

[Mark Stapleton]

The Lithuanian pension system today forecast a vast deficit for this year with accelerating deficits for the next 5 years and beyond. The IMF was very active in "pensions reform" in Lithuania in 1999/2000. The birth/death ratio is definitely listing toward the aged, while the self-proclaimed conservative government engages in a subtle form of whipping up anti-Semitic sentiments, despite the almost total lack of any resident living Jews to target. The Latvian economy was almost totally dependent on foreign leveraging and cheap debt.

Well that's just terrible.

[Helen Reyes]

The Lithuanian pension system today forecast a vast deficit for this year with accelerating deficits for the next 5 years and beyond. The IMF was very active in "pensions reform" in Lithuania in 1999/2000. The birth/death ratio is definitely listing toward the aged, while the self-proclaimed conservative government engages in a subtle form of whipping up anti-Semitic sentiments, despite the almost total lack of any resident living Jews to target. The Latvian economy was almost totally dependent on foreign leveraging and cheap debt.

Well that's just terrible.

LOL I assume you mean about the Jews, and you're being diplomatic

[Jan Klimkowski]

Hopefully the people of Iceland are about to give the Shock Therapists of the IMF, the City of London et al what they deserve: :thefinger::thefinger::thefinger:

Even the very name of this proposal - IceSAVE - is an Orwellian piece of propaganda, when its consequence would be to screw Icelanders for a generation and more.

Iceland Lawmakers Threaten to Reject Icesave Bill a Second Time

Dec. 21 (Bloomberg) -- Iceland’s parliament may reject a foreign depositor bill for a second time in a move that would sour relations with the U.K. and Netherlands and that Fitch Ratings has signaled will weaken the sovereign’s credit grade.

“It’s difficult to think through what will happen if Iceland doesn’t pass the Icesave agreement,” Economic Affairs Minister Gylfi Magnusson said in a Dec. 18 telephone interview.

The depositor accord, which polls show almost 70 percent of Icelanders oppose, is the last milestone the government must reach to repair international relations. Settling claims stemming from Icesave, as the deposit accounts were known, is “key to everything else” and needs to be “resolved pretty shortly,” Fitch senior analyst Paul Rawkins said in an Oct. 21 interview. Fitch ranks Iceland BBB-, one notch above junk.

All 28 opposition lawmakers in the 63-seat parliament will try to block a bill that obliges Iceland to cover the depositor claims using borrowed funds from the U.K. and Netherlands, party leaders told Bloomberg. Thrainn Bertelsson, an independent member of parliament who used to be in the opposition, said in an interview he can’t guarantee he will support the bill.

In the government, Left Green lawmaker Lilja Mosesdottir, who sided with the opposition in an earlier vote, said in an interview she remains “skeptical.” Left Green lawmaker Ogmundur Jonasson declined to say he won’t reject the legislation a second time and fellow Left Green lawmakers Atli Gislason and Asmundur Einar Dadason indicated to local media they may reject the second bill after it was presented to parliament on Oct. 22.

The third and final debate will take place before the New Year, Deputy Chairman of the budget committee Bjorn Valur Gislason said in a Dec. 17 interview.

Anti-Icesave Petition

“Failure to pass the agreement will delay the resurrection of the economy and stall any progress in Iceland’s international relations,” Magnusson said. “It would also delay Iceland’s access to international financial markets.”

Moody’s Investors Service rates Iceland’s debt Baa3, and Standard & Poor’s gives the sovereign a BBB- grade, both ratings are one level above junk. Magnusson said on Nov. 12 he was “optimistic” the island will keep its investment grade status.

Even if the depositor bill does pass through parliament, it must still be ratified by President Olafur Ragnar Grimsson. More than 34,000 people have signed a petition calling on him not to sign the law. If he bows to public pressure, as he did in 2004 on a media ownership bill in response to a petition carrying 32,000 signatures, the bill will be put to a referendum.

‘Healthy’ Banks

Progress on other parts of Iceland’s economic reconstruction has helped improve investor sentiment. The government on Dec. 17 said it spent 250 billion kronur ($2 billion) less than planned in recapitalization costs for the state-created units of the three failed banks after creditors agreed to take on equity stakes. Finance Minister Steingrimur Sigfusson said then Iceland now has three “healthy and fully financed banks.”

Credit default swap spreads on Icelandic debt have narrowed to 420 basis points on Dec. 18 from a peak of 1,096 basis points on March 9. A lower CDS spread reflects investor perceptions of improved credit quality.

The Icesave bill has received more media attention than the island’s other creditor disputes after the failure of Iceland’s banking system last year meant thousands of U.K. and Dutch depositors risked losing their life savings. The U.K. deployed anti-terror legislation to freeze Icelandic assets as uncertainty about cross border banking rules left doubts about which country should bear the cost of covering the claims.

Prime Minister Johanna Sigurdardottir on Oct. 19 presented an accord between her coalition of Social Democrats and Left Greens providing Iceland with a 2.35 billion-pound ($3.78 billion) loan from the U.K. and 1.2 billion euros ($1.71 billion) from the Netherlands to cover the claims.

Eight Times GDP

The October agreement was an amended version of a June accord after lawmakers rejected the first bill.

The failure of Glitnir Bank hf, Kaupthing Bank hf and Landsbanki Islands hf in October 2008 left creditors seeking to recoup about $80 billion in debt, almost eight times Iceland’s gross domestic product. The island has relied on a $4.6 billion International Monetary Fund-led loan since last year to rebuild its economy.

Failure to pass the depositor bill will disrupt the island’s economic program with the fund, Mark Flanagan, head of the IMF’s mission to Iceland, said in an interview. Earlier delays in resolving creditor claims prompted the IMF to push back until October a loan payment due in February.

Opposition Resolve

The chairman of the opposition Independence Party Bjarni Benediktsson said all 16 lawmakers in his party will vote against the bill, while Gunnar Bragi Sveinsson of the opposition Progressive Party said all nine parliamentry members of his party were opposed. Birgitta Jonsdottir, a spokeswoman for the opposition party calling itself The Movement said none of her party’s three members will back the bill.

The deal requires Iceland to pay back the loan, which carries an interest rate of 5.5 percent, over 15 years. It will be interest-only for the first seven years.

http://www.bloomberg.com/apps/news?pid=n...85sXUNswAw

[Jan Klimkowski]

The serfs revolt!

The good folk of Iceland may still be sold out, but it's a promising start..

Iceland's president blocks Icesave compensation to UK
Olafur Grimsson refuses to sign bill that would hand £3.4bn to Britain and Netherlands after anger from the Icelandic people

Graeme Wearden guardian.co.uk, Tuesday 5 January 2010 12.17

The president of Iceland has refused to sign a bill to repay more than €3.8bn (£3.4bn) to Britain and the Netherlands following the collapse of the country's Icesave bank in 2008.

Olafur Grimsson threw the long-running issue into fresh uncertainty today when he declared that a national referendum must be held to determine whether or not the legislation is passed.

This is thought to be only the second occasion when the president of Iceland has refused to ratify a bill passed by the country's parliament. Grimsson took the decision after hearing the depth of public anger in Iceland against the bill, which was narrowly approved by MPs on 30 December.

"The cornerstone of Iceland's constitution is that the nation is the highest judge for the validity of law," said Grimsson. "Now the nation has the power and the responsibility in its hands."

The issue centres on the compensation paid to Icesave account holders by the UK and Dutch governments after the online bank, part of Landsbanki, collapsed in October 2008. Both governments have demanded that Iceland repay this debt. However opponents have claimed that Iceland, whose economy has been badly damaged by the financial crisis, cannot afford the repayments.

A petition urging Grimsson not to sign the bill had attracted 62,000 signatures by last night – a fifth of Iceland's population. Opinion polls suggest that a majority of Icelanders are opposed to the deal.

It is not clear when the referendum will be held. Analysts have warned that Iceland's aid payments from the International Monetary Fund may be frozen until the issue is resolved. Supporters of the legislation have also warned that if Iceland does not repay the money then its efforts to join the EU could be badly damaged.

Yesterday, UK chancellor Alistair Darling said it was vital for Iceland's economic future that the Icesave compensation was repaid.

"I would say to people in Iceland I know this is difficult, but you have to realise that the British government had to step in to deal with a very difficult situation with savers in Icelandic banks," Darling told reporters in London.

http://www.guardian.co.uk/business/2010/...mpensation

[Magda Hassan]

Open Letter: Support Iceland Against the Financial Blackmail of the British and Dutch Governments and the IMF
by Birgitta Jónsdóttir*
A group within the Icelandic Parliament, called The Movement, has emerged from the mass struggle of Icelanders against the financial blackmail brought to bear against their country by the governments in London and The Hague, with the backing of the IMF, in the wake of the insolvency of three large Icelandic banks linked to the Lehman Brothers-AIG world financial panic of September-October2008.


Birgitta Jónsdóttir is the leader of The Movement. January 5, 2010 is a historical day for Icelanders. The Icelandic President Olafur Ragnar Grimsson had a tough decision to make, and difficult choices to make. To listen to the 23% of the nation that signed a petition calling on him to put the state guarantee for 5.4 billion dollars to be paid to the British and Dutch governments to a national referendum. Or to ignore the nation and sign the bill for the government, after the bill had been passed through the parliament with a narrow vote on December 30, 2009 after months of acrimonious debate, tainted with secrecy and dishonesty on the part of the government. Every day throughout the debate, new information would emerge and documents would leak to local media or wikileaks.
Yesterday, the people of Iceland finally had a chance to have something to say about their fate, because if the state guarantee is accepted it will mean that Iceland will become like a third world country, spending its GDP largely on paying interest on foreign debt. Last summer, a bill for a state guarantee was passed that had a significant meaning not only for Iceland, but also for other nations around the world facing the same problems of private debt being forced on taxpayers.
The bill included a reasonable and fair way of handling the interest and the debt: Icelanders would pay, but only a certain percentage of their GDP, and if there were to be another financial black hole, they would not pay during that time. Thus it comes as no surprise that the Dutch and British governments reacted so swiftly with a condemnation of Iceland’s citizens for having the audacity to think they have the right to exercise their democratic rights in deciding for themselves what is in the best economic interests of their nation.
Let’s also put this debt into perspective: 320.000 people live in Iceland, each and every person on the island, including children and the elderly, the disabled and the poor, would have to pay around $30,000 under the bill. The danger if Icelanders will accept this enormous burden is that the entire welfare system would simply collapse with no money to run it. On January 5th the Icelandic president had the courage, backed up by his nation, to place the interest of the people before that of the banks.
Of course there has been an incredible spin by the government controlled media, attacking the nation and the president for this simple and fair demand. The UK and Dutch media were also full of misleading news, saying the nation had demanded not to pay, and that we would become isolated and there were even suggestions that the British navy should flex its muscles against this nation which has no military. As if the terrorist act they imposed on us was not enough during the darkest hour of our crises to bring us further down!
The spin is failing because people around the world are finally starting to hear our side of the story, and other suppressed nations have perhaps seen this as a sign that they can also rise up against the corpocracy in our world where those with the money have as a rule always won. Let’s hope the nation will not been coaxed into fear of isolation and let’s hope the people of the world will join in this experiment of letting the interest of the peoples rise above the interests of banks, corporations, and international bullies such as the IMF. We need your support. I will soon issue a comprehensive report on the entire Icesave saga.
Love and rage from Iceland

Birgitta Jónsdóttir
Party group chairman for The Movement in the Icelandic Parliament