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Discussion Starter · #1 ·
Iceland voters reject plan to repay bank debt

Voters in Iceland issued a resounding “no” in a referendum on whether to approve a renegotiated deal to compensate Britain and the Netherlands over the 2008 collapse of Icesave Bank, leaving the issue to be settled in court.
By News Wires (text)


REUTERS - Iceland faces more economic uncertainty and a drawn-out European court case after its voters rejected for a second time a plan to repay $5 billion to Britain and the Netherlands from a bank crash.

The British and Dutch governments voiced disappointment with the result of Saturday's referendum, in which almost 60 percent of voters opposed the repayment deal.

"We must do all we can to prevent political and economic chaos as a result of this outcome," Prime Minister Johanna Sigurdardottir told state television.

The issue will now be settled by the court of the EFTA Surveillance Authority (ESA), the European trade body overseeing Iceland's cooperation with the European Union.
"My estimate is that the process will take a year, a year and a half at least, Finance Minister Steingrimur Sigfusson told a news conference.

The debt was incurred when Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki, one of three overextended Icelandic banks that collapsed in late 2008, triggering an economic meltdown in the country of 320,000 people.

Economists have said failure to resolve the issue means Iceland faces delays ending currency controls, boosting investment and returning to financial markets for funding.

But the centre-left coalition government said it would not resign despite the defeat.

"The government will emphasize maintaining economic and financial stability in Iceland and continuing along the path of reconstruction which it began following the economic collapse of 2008," it said in a statement.

It said a fresh round of talks on further funding from the International Monetary Fund, which led a bailout for the island, would be delayed several weeks, but that it had enough foreign exchange reserves to cover debts maturing this year and next.

Court case ahead

The proposed deal at issue in Saturday's vote set a clear timetable for repaying the Dutch and the British, including interest. But voters rejected the idea that taxpayers should foot the bill for what they see as bankers' irresponsibility.

"I know this will probably hurt us internationally, but it is worth taking a stance," Thorgerdun Asgeirsdottir, a 28-year-old barista, said after casting a "no" vote.

Dutch Finance Minister Jan Kees de Jager said: "This is not good for Iceland, nor for the Netherlands. The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide."

Economists have said the court route could be much costlier.

The government still hopes most of the debt will eventually be paid back from the estate of the bankrupt Landsbanki. Ratings agencies were following the vote closely. Moody's had said it might lower Iceland's rating in case of a 'no'.

Standard & Poor's analyst Eileen Zhang said a 'no' vote "might possibly result in a lengthy legal process and further uncertainties regarding the ultimate fiscal cost".

http://www.france24.com/en/20110410...ensation-uk-netherlands-bank-collapse-iceland
 

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A glimpse of the future for many countries, including the U.S. It's fun to live the high life on borrowed money. Not so fun to pay it back. A referendum vote is a stupid way to make the decision. A vote against repayment is expected. Voters don't understand the problems that causes for future economic activity. They just want to stick it to the banks. There will definitely be a price to pay in the long run.
 

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Discussion Starter · #3 ·
A glimpse of the future for many countries, including the U.S. It's fun to live the high life on borrowed money. Not so fun to pay it back. A referendum vote is a stupid way to make the decision. A vote against repayment is expected. Voters don't understand the problems that causes for future economic activity. They just want to stick it to the banks. There will definitely be a price to pay in the long run.
:laughing: Yeah,something about the banks turning their economy into a casino and losing their investments don't sit well..

But your right, the criminals will make them pay dearly.
 

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:laughing: Yeah,something about the banks turning their economy into a casino and losing their investments don't sit well..

But your right, the criminals will make them pay dearly.
But this doesn't hurt the banks that did the damage. It's a vote against paying back the banks from other countries that bailed them out. What's right about that?
 

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Discussion Starter · #5 ·
But this doesn't hurt the banks that did the damage. It's a vote against paying back the banks from other countries that bailed them out. What's right about that?
The debt was incurred when Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki, one of three overextended Icelandic banks that collapsed in late 2008, triggering an economic meltdown in the country of 320,000 people.

How are the Iceland people responsible for this? Some criminals scammed the system, took the money and ran..
 

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The debt was incurred when Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki, one of three overextended Icelandic banks that collapsed in late 2008, triggering an economic meltdown in the country of 320,000 people.

How are the Iceland people responsible for this? Some criminals scammed the system, took the money and ran..
Unless I'm not understanding the situation, some Icelanders (bankers) took off with other Icelander's money. Some foreign banks loaned the Icelanders money to keep their banking system afloat, and now the Icelanders don't want to pay the foreigners who bailed them out. I ask again, what's right about that? Is every banker in the world evil because some of them failed to live up to their obligations?
 

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Discussion Starter · #7 ·
Unless I'm not understanding the situation, some Icelanders (bankers) took off with other Icelander's money. Some foreign banks loaned the Icelanders money to keep their banking system afloat, and now the Icelanders don't want to pay the foreigners who bailed them out.
No, some banksters set up a ponzi scheme in Iceland, it ran it's course and crashed like all the other ponzi schemes they had set up. The British and Netherland governments paid their own depositors, and now want the people of Iceland to cover the losses associated with the ponzi scheme.

Not much different from the ponzi scheme we will be left paying for..
 

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No, some banksters set up a ponzi scheme in Iceland, it ran it's course and crashed like all the other ponzi schemes they had set up. The British and Netherland governments paid their own depositors, and now want the people of Iceland to cover the losses associated with the ponzi scheme.

Not much different from the ponzi scheme we will be left paying for..
I don't think the Brits and Netherlands just did this on their own. I think it was part of an overall bailout by the IMF. Iceland needed and wanted that bailout. These governments supporting their investors on behalf of Iceland was part of a package that Iceland knew it was supposed to pay back. Wonder how long it will be before we decide to bail on our debt to China? Apparently all we have to do is declare our debtors to be bad guys and then summarily dump them. That's a very good way to screw up the entire world economy. In Iceland's case, wonder where they will turn the next time they need bailing out?
 

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Discussion Starter · #9 ·
Apparently all we have to do is declare our debtors to be bad guys and then summarily dump them. That's a very good way to screw up the entire world economy. In Iceland's case, wonder where they will turn the next time they need bailing out?
:laughing: You know Tex, there is a lot of forest out there, just beyond the trees...

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

What part of this escapes you?
 

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:laughing: You know Tex, there is a lot of forest out there, just beyond the trees...

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

What part of this escapes you?
I'm just going by the original article. I don't see where any of the parties involved said this was a Ponzi scheme. I know you call it that, but you call every failed investment a Ponzi scheme, so giving me the definition doesn't really mean much. The only question I see here, legally, is, did the Iceland government agree to repay the money paid out by the Brits and Netherlands? I don't know the answer to that, and the article doesn't make it clear. My guess is that they did as part of a package offered by the IMF. If they did, they should pay it back regardless of who lost the money or how they lost it.
 

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I'm just going by the original article. I don't see where any of the parties involved said this was a Ponzi scheme. I know you call it that, but you call every failed investment a Ponzi scheme, so giving me the definition doesn't really mean much. The only question I see here, legally, is, did the Iceland government agree to repay the money paid out by the Brits and Netherlands? I don't know the answer to that, and the article doesn't make it clear. My guess is that they did as part of a package offered by the IMF. If they did, they should pay it back regardless of who lost the money or how they lost it.
:laughing: Yep, stick it to em! That's what they get for letting the crooks set up shop.

Stockholm syndrome..
 
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