Icelandic lessons in coming back from the brink

Steingrímur Sigfússon – Financial Times August 20, 2012

Iceland’s economy melted in the autumn of 2008. The world saw the demise of an entire national financial system. An overinflated banking sector collapsed in a week; the exchange rate of the krona plunged 40 per cent against the euro, inflation and interest rates jumped to 18 per cent, the standard of living fell sharply and the unemployment rate went from near zero to nearly 10 per cent. Debt piled up, revenues shrank and expenditure soared.

In late 2008 and early 2009, the outlook was dark. The question seemed not to be whether Iceland would default on its obligations, but when.

Continues at source …

Comment – August 24, 2012

Don’t bother reading the rest of the Financial Times article because it doesn’t tell you what Iceland actually learned from the crisis. It blathers on about how Iceland’s “economic turnround is now well established.” 
And how “Many lessons have been learned…”
So how was this turnaround achieved and what were the lessons learned? The Financial Times doesn’t actually say. Instead, it requires subscription to read the rest of the article and, just like the bankers, demands more money if you wish to read more
Even then it doesn’t tell you how Iceland REALLY solved the economic conundrum it faced.
However, the article below from Before It’s News does.
Icelanders refused to pay what the bankers demanded. Instead, many high level bankers were arrested and then, as if by magic, Iceland and its economic problems suddenly disappeared from the media.
While it was out of the news however, Iceland’s economy underwent a dramatic turnaround. As Before It’s News details below, Iceland experienced an economic and political revolution and is now all the better for having defied the bankers and told them what to do with their debts.
All of which may explain why we don’t hear too much about Iceland and its economy in the news these days.

 Icelanders Didn’t Bail Out The Bankers – They Prosecuted Them And Created Something New

Before It’s News – April 13, 2012

In Iceland, the people has made the government resign, the primary banks have been nationalized, it was decided to not pay the debt that these created with Great Britain and Holland due to their bad financial politics and a public assembly has been created to rewrite the constitution.
And all of this in a peaceful way.
A whole revolution against the powers that have created the current crisis. This is why there hasn’t been any publicity during the last two years: What would happen if the rest of the EU citizens took this as an example? What would happen if the US citizens took this as an example.
This is a summary of the facts:
2008. The main bank of the country is nationalized.
The Krona, the currency of Iceland devaluates and the stock market stops.
The country is in bankruptcy
2008. The citizens protest in front of parliament and manage to get new elections that make the resignation of the prime minister and his whole government. The country is in bad economic situation. A law proposes paying back the debt to Great Britain and Holland through the payment of 3,500 million euros, which will be paid by the people of Iceland monthly during the next 15 years, with a 5.5% interest.
2010. The people go out in the streets and demand a referendum. In January 2010 the president denies the approval and announces a popular meeting. In March the referendum and the denial of payment is voted in by 93%. Meanwhile the government has initiated an investigation to bring to justice those responsible for the crisis, and many high level executives and bankers are arrested. The Interpol dictates an order that make all the implicated parties leave the country.
In this crisis an assembly is elected to rewrite a new Constitution which can include the lessons learned from this, and which will substitute the current one (a copy of the Danish Constitution).
25 citizens are chosen, with no political affiliation, out of the 522 candidates. For candidacy all that was needed was to be an adult and have the support of 30 people. The constitutional assembly starts in February of 2011 to present the ‘carta magna’ from the recommendations given by the different assemblies happening throughout the country. It must be approved by the current Parliament and by the one constituted through the next legislative elections.
So in summary of the Icelandic revolution:
-resignation of the whole government
-nationalization of the bank.
-referendum so that the people can decide over the economic decisions.
-incarcerating the responsible parties
-rewriting of the constitution by its people
Have we been informed of this through the media?
Has any political program in radio or TV commented on this?
The Icelandic people have been able to show that there is a way to beat the system and has given a democracy lesson to the world.


One response to “Icelandic lessons in coming back from the brink”

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