Friday, April 15, 2011

Iceland to Icesave: No Means No

Last Saturday, April 9th, Iceland voted for a second time on a Icesave payment program designed to pay UK and Dutch investors, who sought high yield investments in Icelandic banks which failed, the money they foolishly lost.  They had already rejected a proposal in a prior vote.

Why were they being asked a second time?  Approval would mean decades of  poverty, bankruptcy, and workforce emigration.  Iceland does not belong to the European Union and it was being threaten with membership rejection if it voted no again.  Given the economic destruction perpetrated upon Greece and Ireland by the EU-IMF and the growing civil unrest against austerity in countries throughout the EU, why would Iceland want to join the suicidal march towards austerity and financial oligopoly?  The UK, Netherlands, and the EU have tried to repeatedly extort and bully Iceland to indenture its citizens, as the citizens of Ireland have been indentured.Yet, the government of Iceland keeps bowing to the foreign creditors and financial interests of Greater Europe to pay what it would not owe even under EU law, although it continues to be threatened with legal action, EU membership rejection, and withdrawal of IMF support.  Without Icesave, Iceland's debt is estimated at 260% of GDP despite a remarkable recovery since Iceland devalued its currency and let the banks fail rather than provide government guarantees to fraudulent banks and those who do not want to suffer loss for chasing risky high yields.  Is the European Union demanding the return of feudalism under the guise of financial corporatism?

58% voted NO.  The UK and the Netherlands immediately expressed disappointment and pledged continue demands for payment of the monies they reimbursed their own citizens for making bad, injudicious financial investments/bets.  Even the credit rating agencies, whose clients are banks, had threatened the people of Iceland with sovereign credit rating downgrades.  The Netherlands followed-up with the possibility it would veto any attempt of Iceland to join the EU.  The simple issue is that Iceland refuses to pay creditors of failed private banks; let the creditors retrieve what they can from the failed banks and their officers.  Why should international creditors expect and demand that sovereign nations bailout private credit institutions with public money?  Why should Iceland accept a decade or more of economic depression to "save face"?

Despite many attempts to compare Iceland and Ireland economically, the basic differences are that Iceland has its own fiat currency and refused to extend government guarantees and public money to bailout failed private credit institutions for the benefit of foreign creditors/banks.  The responsibility of any sovereign nation is to protect its citizens.  The pursuit of the government of Iceland to appease the EU with the purpose of joining the EU  and maybe the euro is repeatedly contrary to not only the best interests of the people of Iceland but the wishes of the people for national sovereignty.  It's export economy is growing; why should it want to join the eurozone where the EU and Germany, as the dominant exporting country, wants no competition, only peripheral debtor importers and austerity programs imposed on nations to create and perpetuate debt, eliminating competition?  There may be no fiscal union in the eurozone, but there is an evolving undemocratic financial hegemony.

Protests against are spreading throughout the EU against the economically destructive outcomes of austerity.  Greeks are in revolt against paying taxes and fees.  Ireland is being threatened with withdrawal of EU liquidity to keep it distracted from analyzing the benefits of defaulting on non-sovereign debt, much like de Valera did.  Portugal is faced with demands it institute austerity programs before it receives financial assistance needed before the end of May.  Which country is going to be the next country to say NO -- we will not be indentured servants?

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1 comment:

  1. Iceland Says No ... The island nation may serve as an example for those who want capitalists to operate at their own risk. In a national referendum Saturday, Icelanders, for the second time, voted against a government proposal to pay the big losses of some of their bankers and their foreign customers, with 60% voting "No" and 40% in favor.

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