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Icesave for dummies (including me)

January 15th, 2010 Leave a comment Go to comments
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Icesave / Iceslave

The Icesave debacle is an intimidating subject, even for those who are interested in it. Then there are those of us who have no interest in it but have to understand it as it affects us personally. Everybody here in Iceland is tired of it and everybody changes their position towards it just as often as their underwear. The story goes something like this:

Landsbankinn opened the online savings brand in the United Kingdom and Holland. They promised accounts with great interests and it attracted a lot of customers. It turned out that the bank didn’t have the funds to finance the interests and borrowed money from other banks, who in return borrowed from yet another since the funds literally didn’t exist. Anyone with half a brain can see that this circle of lending each other money can not sustain itself, and the banks were in huge debts. Landsbankinn collapsed in early October, 2008, followed by two other big banks in Iceland. The bankers responsible can in no way pay those debts, so it has fallen on the Icelandic government, i.e. the citizens of Iceland. The people are not entirely happy with this, that they (we) have to pay Britain $3.75 billion and the Netherlands $1.72 billion. The Icelandic parliament accepted what has become known as the Icesave bill, that is Iceland would pay those debts. Ólafur Ragnar Grímsson, president of Iceland, refused to sign the bill and sent it to referendum.

This might be over simplified, and simply wrong in some aspects, but it only goes to show how complicated the whole issue is. Not only for people interested, but for those of us who are not at all interested in it but are forced to follow it on the news if we are at all interested in our future.

This has been an incredibly boring post and I promise never to write anything like this ever again.

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