Tiny Iceland teaches the West how to treat bankers

Visit of Sigurður Ingi Jóhannsson, Icelandic Minister for Fisheries and Agriculture, and Minister for the Environment and Natural Resources, to the European Commission. Round table: (from left to right) Thórir Ibsen, Head of the Mission of Iceland to the EU, Sigurður Ingi Jóhannsson, Maria Damanaki EU Commissioner for Fisheries and Andreas Papaconstantinou, Member of the cabinet of Maria Damanaki. (EC Audiovisual Services).

Visit of Sigurður Ingi Jóhannsson, Icelandic Minister for Fisheries and Agriculture, and Minister for the Environment and Natural Resources, to the European Commission. Round table: (from left to right) Thórir Ibsen, Head of the Mission of Iceland to the EU, Sigurður Ingi Jóhannsson, Maria Damanaki EU Commissioner for Fisheries and Andreas Papaconstantinou, Member of the cabinet of Maria Damanaki. (EC Audiovisual Services).

Sigmundur Davíð Gunnlaugsson, the Prime Minister of Iceland, hardened by adverse weather and isolation as all his compatriots, when in Brussels last summer, delivered two lessons to EU bureaucrats and dignitaries, softened by indoor life. He taught them how to treat fraudulent bankers and who to fish mackerel. Yesterday tiny Iceland accomplished its teaching course of how to treat fraudulent bankers, by sentencing three former top managers and the major shareholder of the Kaupthing bank for up to five years in jail. They are the former CEO of the bank, the chairman, the majority owner and the head of the Luxembourg affiliate.

Kaupthing along with Landsbanki and Glitnir, the three major Icelandic banks, went bankrupt in 2008, affected by the spillovers of the great financial crunch that first erupted in the US. Unlike the rest of the western countries, however, Iceland’s taxpayers didn’t cover the losses of those careless banks neither did they compensate their equally careless creditors. The three banks had borrowed many times the GDP of Iceland and the country’s government decided to let them rot along with their creditors and high yield seeking depositors.

Taking care of the poor

At the same time Iceland took extraordinary measures to protect the weaker part of the population during the hard times that followed. The national money was greatly devalued and fuel and food suddenly became very scarce. In any case, Iceland has now fully recovered, due to the hard work of its people and by applying the right economic policies. On the contrary Ireland, when confronted with exactly the same problem – when the Irish banking system collapsed – was forced by the European Central Bank to borrow around €90 billion and instructed to bail out all fraudulent bankers.

Of course the Irish people paid a dear price for that, with three years of austerity policies, deep economic recession, devastating unemployment rates and a sovereign debt that has now reached 120% of the GDP. As a result, the country’s taxpayers will be burdened all along the next twenty to thirty years to repay the debts of the bankers. In the case of Iceland after the first difficult year, the economy started to recover and the country owes nothing to anybody. On top of that, Iceland’s penal system found the bankers of Kaupthing guilty of fraud. They hide the fact that a foreign investor, who had bought a large stake in their bank weeks ahead of the fall, had done so with a loan from this same lender.

The justification

The remote island country didn’t escape that easy from the wrath of the major world banks, which controls countries and governments. Iceland was attacked by Britain and Holland for not having compensated their own citizens who had deposited and lost money in the Icelandic banking system. This was the famous Icesave affair. However, the European Free Trade Association (EFTA) Court where Britain and Holland took their case, rejected all , that Iceland should be declared in breach of the European Economic Area Agreement. The Court also rejected the claim that Iceland has breached the EU Deposit Guarantee Directive or has discriminated against depositors contrary to European Economic Area law. London and The Hague were called to pay for the judicial costs. The decision was final because there is no appeal.

Last but not least, it must be mentioned that the four above mentioned bankers were charged to pay millions in judicial expenses. It must also be noted that there are more penal cases against Iceland’s bankers. Unfortunately, this is not the case in other western countries where the banks drove the economy to chaos back in 2008-2009.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Ukraine: €8 million in humanitarian aid to withstand winter

We had the hottest June ever this year – this is what happened around the world

Can self-charging batteries keep us connected for ever? A young scientist explains

High-tech or ‘high-touch’: UK survey gives clues to the jobs of the future

45th Anniversary of the French Confederation (Confédération Nationale des Junior Entreprises)

One good reason to feel less blue about the future of our oceans

OK computer: why the machine age still needs humans

DR Congo: Ebola response resumes despite ‘risky environment’

Coronavirus: MEPs call for solidarity among EU member states

Trump reshapes the Middle East at the expenses of Europe

UN resolution paves way for mass use of driverless cars

G20 LIVE: Fact Sheet from the G20 Leaders Summit and key outcomes (G20 Antalya 2015 Summary)

Migration crisis update: What are the chances of a fair deal at this EU Summit?

In Venezuela, Bachelet calls on Government to release prisoners, appeals for ‘bold steps towards compromise’

Why this city is paying people to move there

The JADE Spring Meeting is about to begin

Parliament demands ban on neo-fascist and neo-Nazi groups in the EU

Greece @ MWC14: Greek-born mobile champions at MWC 2014

New York and London mayors call on cities to divest from fossil fuels

Rights defenders jailed in Bahrain and UAE should be released unconditionally, UN urges

E-energy declaration: will energy digitalization be beneficial to the climate?

We underestimate the power of data at our peril. This is why

UNICEF reports uneven progress in 30 years of child rights treaty

Somalia: UN mission head condemns deadly terrorist attacks in Mogadishu, Galkayo

Here’s how the US can get the best out of 5G

Will Cameron succeed in keeping UK inside the EU and reverse the present economic downturn?

How venture capital can transform global health

The EU Parliament endorses tax on financial transactions

Why we need to redefine trust for the Fourth Industrial Revolution

European Youth Forum warns of a Peter Pan generation as a result of financial crisis and response to it

Siege of Syria’s eastern Ghouta ‘barbaric and medieval’, says UN Commission of Inquiry

3 steps to making multistakeholder partnerships a powerful force

Roaming market review: use of mobile phones abroad has surged since end of EU roaming charges

Inclusion and diversity isn’t just good for employees – it’s good for the bottom line

Except Poland, can climate change also wait until 2021 for the EU Market Stability Reserve to be launched?

China and China-EU Relations in the New Era

The European Commission and EU consumer authorities publish final assessment of dialogue with Volkswagen

The Parliament defies a politically biased Banking Union

We can’t tell if we’re closing the digital divide without more data

Costa Coffee products (Copyright: Costa Coffee; Source: Costa Coffee website, Press area)

The start of the “Caffeine rush”: Coca-Cola acquires Costa Coffee days after Nestlé-Starbucks deal

Adriatic Sea: MEPs adopt multiannual plan for fisheries

Doctors vs. Industry 4.0: who will win?

The hottest new craze for German millennials? Gardening

ECB should offer more and cheaper liquidity if Eurozone is to avoid recession

Russia – US in Syria: Selling Afrin to Turkey but facing off ruthlessly for Ghouta

UN rights expert calls for civilian protection as fighting escalates between military and armed group

Caravan of Mothers of Missing Migrants kick off a global migration search movement

The West and Russia took what they wanted from Ukraine

Why enterprise risk management is the future for banks

Energy Union: Commission calls on Member States to step up ambition in plans to implement Paris agreement

FROM THE FIELD: A mountain of indigenous knowledge in Peru

Electronic cigarettes: is it really a safe alternative to smoking?

European Business Summit 2013: Where Business and Politics shape the future

5 things to know about the exploding world of pro gaming

These are the fastest trains in the world

To Bing or Not to Bing? That is the question

The Commission neglects the services sector and favours industry

The European Youth Forum needs better signal for its “call” for Quality Internships

Eurozone governed by an obscure body and gray procedures

UN launches drive to highlight environmental cost of staying fashionable

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s