What is actually going on in IcelandSubmitted by Ian56 on Sat, 01/05/2013 - 06:28
Since people continue to spread the factually dubious statement that Iceland “told creditors & IMF to go jump, nationalised banks, arrested the fraudsters, gave debt relief and is now growing very strongly, thanks” I find I have to write this here thing.
(This specific example comes from twitter but is almost identical, word for word, to the standard ‘Iceland is an economic utopia’ mantra that is being repeated ad nauseam.)
Because, for some reason, people won’t believe Icelanders when they say that the above is not quite the reality as most Icelanders experience it.
1. Iceland told IMF to go jump, go away, left the IMF program etc.
No it didn’t. Just look at the IMF’s country overview page for Iceland and read the reports.
(Too much to read? Well, boohoo. Don’t claim to know what Iceland’s and IMF’s relationship is until you have.)
Even a cursory look should tell you that Iceland didn’t throw the IMF out of the country and that the IMF’s praise for Iceland and our government is effusive and that Iceland followed the IMF’s advice to a tee. There are other details there, if you read through the archives, that are interesting, such as the fact that in several cases, especially when it came to the banks, Iceland actually went further along the libertarian axis than the IMF recommended.
2. Iceland told the creditors to go jump.
Yes and no. Iceland didn’t bail out the collapsed banks, but that wasn’t for the want of trying. If you read through the Report of the Special Investigation Commission you’d find out that the Icelandic government tried everything it could to save the banks, including asking for insane loans to pay off the banks’ debts.
The report: http://sic.althingi.is/
Most of it, and most of the really juicy stuff IMO, is only available in Icelandic, unfortunately. You can find the Icelandic version here: http://rna.althingi.is/
So the true story is that Iceland tried and tried and tried and tried as hard as we could to save the creditors. The only reason why we didn’t is that the Icelandic government, then and now, is completely incompetent.
Dumb things Icelandic officials did while trying to garner international support (mentioned in the report) :
Spin that a noncommittal but positive reply from the Russians was a loan agreement, pissing off the Americans and the Russians resulting in no loans from either.
Not answering Alistair Darling’s phone call (he was the UK’s Chancellor of the Exchequer or finance minister at the time). They literally put him on hold, then told him to call later and hung up.
Announcing on live TV that we were not going to help creditors, including those who had deposits, while they were in the middle of negotiations for funding to save said banks. Then having to backtrack to get any sort of help from the EU.
Lying to the governor of the Bank of England and the president of the European Central Bank about the state of the banks.
And plenty more. All in the special report. Read it if you care about what happened in Iceland. The short version is that they tried to save the banks, save the creditors and screwed up completely.
Other tidbits from the report: Icelandic MP’s received a lot of no-strings-attached free money from the banks and the key players in the banking bubble and ensuing collapse are not the same as the people who are being convicted for fraud or insider trading.
Except for two:
A ministry department head (also my namesake) who sold all of his stock soon after he attended a meeting on the state of the banks was convicted for insider trading. Baldur sakfelldur. The only reason why he was convicted is because he was too stupid to even try to cover his tracks.
Continued at :-