Iceland recently had its 2nd referendum on if we should pay back via taxpayers the losses paid by the UK and Netherlands to its people. The first deal was a brutal one and lost with a massive margin, this latest one was quite favorable in comparison yet lost again this time 60/40 margin in a debate heated and filled with threats from moody's the IMF and of course the UK/Netherlands.
Our president, which is an elected position which is a lifetime term, he used a rare right of his to veto the parliament vote which agreed to the recent icesave agreement with a 70% cross party vote, forcing a 2nd referendum, here's his recent almost hostile interview with a finance journalist from the UK:
The Icelandic decision is starting to resonate to other EU nations like Ireland who are regretting bowing down to the banks and financial system, burdening their nations with huge debt to their citizens.
Quote:
Unnoticed it may be, but Reykjavik now serves as a very different kind of parable, of how to minimize the misery of financial collapse by ignoring economic orthodoxy. And in those other broke European economies – from Dublin to Athens to Lisbon – politicians and voters are starting to pay attention. After its three biggest banks – 85% of the country's financial system – failed in the same week, Iceland did two remarkable things. First, it let the banks go under: foreign financiers who had lent to Reykjavik institutions at their own risk didn't get a single krona back. Second, officials imposed capital controls, making it harder for hot-money merchants to pull their cash out of the country.
These policies were not just controversial; they represented a two-fingered salute to the polite society of academics and policy-makers who normally lay down the laws on economic disaster management.
Compare Iceland's policies with those followed by another tiny country in the North Atlantic, which also has a banking industry much bigger than its national economy. When the credit crunch came to Dublin, the government decided to underwrite the entire banking industry – including tens of billions of euros of loans made by foreign investors. That landed the country with a debt worth something like €80,000 for every household – a debt that effectively bankrupted the country.
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http://www.guardian.co.uk/commentisf...rtugal-markets