25% of Iceland voters don't want Icesave cash repaid to British savers

[Dolph]

dont forget the uk government used the 2001 terror act on them, before they failed.

No they didn't.

They used the 2001 Anti terrorism, crime and security act.

The asset freezing part of the act (Part 2) has nothing to do with terrorism.

http://www.opsi.gov.uk/Acts/acts2001/ukpga_20010024_en_2#pt2

(1)
The Treasury may make a freezing order if the following two conditions are satisfied.



(2)
The first condition is that the Treasury reasonably believe that—



(a)
action to the detriment of the United Kingdom’s economy (or part of it) has been or is likely to be taken by a person or persons, or



(b)
action constituting a threat to the life or property of one or more nationals of the United Kingdom or residents of the United Kingdom has been or is likely to be taken by a person or persons.



(3)
If one person is believed to have taken or to be likely to take the action the second condition is that the person is—



(a)
the government of a country or territory outside the United Kingdom, or



(b)
a resident of a country or territory outside the United Kingdom.



(4)
If two or more persons are believed to have taken or to be likely to take the action the second condition is that each of them falls within paragraph (a) or (b) of subsection (3); and different persons may fall within different paragraphs.

Refusal to honour conditions of banking in the UK, thereby effectively destroying significant assets of the UK population, having nationalised a bank, is covered by just that part of the act.

 

[muon]

Another example of why popular opinion can be so very wrong.

Making this compensation payment will go some way to restoring confidence to invest in iceland again.

Doing nothing will continue the idea that Iceland is an irresponsible country with no ethics.

Which one makes more sense in the long run?

Well there has to be a point where the compensation payment is large enough to be not worthwhile. 12,000 euros seems pretty hefty. Would be interesting to see what the eventual cost to defaulting countries has been in the past.

Even if it is worthwhile, it probably requires intergenerational altruism. It's very easy for governments and people to pass on the costs of a recession or war to future generations, but not so easy to pay now for the benefit of future generations.

Is it even rational (ignoring where we have a benevolent planner) for a middle aged person to incur a cost so that someone 30 years down the line can benefit? Interesting dilemma I'd say. What safeguards can be put in place to prevent this moral hazard problem? Invasion is no longer a viable threat.

 

[kaks]

Given how much most of us resent paying back cash lost by British savers in British banks, I can see their point.

It's amazing that so few people can see this...

 

[starfighter]

I can see why the people are annoyed, just like many are here with our government but they shouldn't take it out on Britain.

Iceland enjoyed the benefits of not being in the EU or paying any money to the central pot for when **** hit the fan and they made loads of moneys and reaped the rewards. It messed up and now they have to pay.They should have to have to pay it all back.

I also agree that it was people in Britains fault for investing abroad, trying to get higher interest, they knew the risks etc..

 

[regulus]

I gather they want to join the EU and not paying it back would basically mean they would be rejected.

Why would they want to join the EU? You think that's some magical milestone for most countries?

They are already part of the EEA community with most of their market relations covered with what is basically EU law. Well, apart from things like fisheries which they only share with a select few countries.

 

[semi-pro waster]

Is it even rational (ignoring where we have a benevolent planner) for a middle aged person to incur a cost so that someone 30 years down the line can benefit? Interesting dilemma I'd say. What safeguards can be put in place to prevent this moral hazard problem? Invasion is no longer a viable threat.

Since in this situation the middle aged people (or at least those in charge at the point of this current generation) worked to create this problem then it would not seem entirely untoward that they should be expected to pay for the remedy of the situation.

 

[scorza]

It's amazing that so few people can see this...

While it's quite right that most people resent bailing out the British banks, I doubt many of us would argue that it shouldn't have been done. Iceland has a duty to meet its obligations and pay back the money owed to the British and Dutch governments.

 

[Briton]

The icelandic banks were signed up to the same code as UK banks to guarantee I think £35k per person but refused when it turned out that they would have to which is when our government stepped in. Should never have been a gamble saving in those banks.

From what I remember, and I nearly put some money in an Icelandic bank, they were part of the European scheme that guaranteed a little more than the £35k that the British did at the time.

 

[Raumarik]

Given how much most of us resent paying back cash lost by British savers in British banks, I can see their point.

Agreed, also right now it doesn't exactly look like they can manage it. If you were asked to pay back money which would leave you even worse off I doubt you'd be happy about it.

 

[Jokester]

I also agree that it was people in Britains fault for investing abroad, trying to get higher interest, they knew the risks etc..

They weren't investing abroad though. To sell banking products (indeed to sell any products) in the EU/EEA you MUST comply with applicable EU law. The main point being that they needed to provide a deposit insurance scheme upto a minimum value. To achieve this in Icesave's case they decided to opt out of the UK scheme and use the Iceland scheme, which when the **** hit the fan turned round told everyone else to FRO.

There should have been no risk legally, as it is the UK Scheme has paid out the full amount to those affected and if this deal isn't agreed the UK and other affected nations will seek compensation via other means from Iceland.

 

[muon]

Since in this situation the middle aged people (or at least those in charge at the point of this current generation) worked to create this problem then it would not seem entirely untoward that they should be expected to pay for the remedy of the situation.

But that's why I called it a Moral Hazard problem. If the current generation can default easily on any debts (which can possibly be to their benefit even in an intergenerational sense if the debt is large enough), then those debts are more likely to happen in the first place. Another reason why Iceland should be forced to pay perhaps.

Also, I'm not sure how much of a motivator, the sense of responsibility is. Although the usual argument used is the household/family linkages. Since people care about their children and grand children, even 3 generational altruism is a good approximation to infinite generational altruism. If I care about my grand children and children who in turn care about their own children and grandchildren (and so on), then I also care about all future generations.

 

[lionheart766]

Prepare the invasion fleet.....

 

[platypus]

And 25% of their voters, perhaps unsurprisingly, don't want this cash to be paid back at all.

No, not surprising at all.

Odd that you've given the thread such an inflammatory headline, given that we as a population are in exactly the same mindset with our banks.

 

[NathanE]

No, not surprising at all.

Odd that you've given the thread such an inflammatory headline, given that we as a population are in exactly the same mindset with our banks.

The headline is just summarising the content of the article. That's generally what a headline is for. It just so happens that the content of the article is generally perceived in a negative way by anyone that isn't Icelandic.

 

[Hatter The Mad]

The headline is just summarising the content of the article. That's generally what a headline is for. It just so happens that the content of the article is generally perceived in a negative way by anyone that isn't Icelandic.

The headline is inflammatory.

This is not about Iceland repaying "British savers". This is about Iceland repaying the "British government", who were stupid enough to guarantee 100% of savings, rather than the usual FSA £50k.

 

[NathanE]

The headline is inflammatory.

This is not about Iceland repaying "British savers". This is about Iceland repaying the "British government", who were stupid enough to guarantee 100% of savings, rather than the usual FSA £50k.

And that is being pedantic?

If you analyse something further that it was intended to be then of course you will find faults with it.

This is GD, not SC.

 

[Hatter The Mad]

And that is being pedantic?

No, it isn't...

It is a fundamental error and misrepresentation.

- British savers have been repaid already.
- Iceland voters were not petitioning to 'not repay British savers'. For all we know they sympathise with the British savers, but they know they have been repaid.
- The bill being considered in Iceland is for payments to the British treasury.
- The petition is against this bill.

Yes, I know this is GD. But GD is not the Daily Mail. Too many people here add their own 'spice' to thread titles in order to evoke a response, and it is bs.

 

[Jokester]

The headline is inflammatory.

This is not about Iceland repaying "British savers". This is about Iceland repaying the "British government", who were stupid enough to guarantee 100% of savings, rather than the usual FSA £50k.

This is about the Icelandic government repaying the British government for their share of the insurance payout, ie upto the first 20,000 Euros, that they were required to pay. What the UK Financial Services Compensation Scheme did after that is neither here nor there.

 

[NathanE]

No, it isn't...

It is a fundamental error and misrepresentation.

- British savers have been repaid already.
- Iceland voters were not petitioning to 'not repay British savers'. For all we know they sympathise with the British savers, but they know they have been repaid.
- The bill being considered in Iceland is for payments to the British treasury.
- The petition is against this bill.

Yes, I know this is GD. But GD is not the Daily Mail. Too many people here add their own 'spice' to thread titles in order to evoke a response, and it is bs.

It was a BBC article.

Shame on me for writing "British savers" instead of "British government". At the end of the day, it amounts to almost the same thing. Considering it is British tax payers that are being used to secure all these billion dollar loans and bonds against.

 

[platypus]

Yes of course it's the same thing given our financial stature at the moment.

Still an unnecessary headline - even if it wasn't your own doing.